Industries Limited
CaseStudy: Reliance Petroleum Retail
By: GarvitGarg
IIPM, Bangalore
Case Description
• RIL had accounted for around 3% of the total
petrol pumps operated in the country.
• Owned 1432 pumps
• 900 were owned by the company and the
remaining were dealer owned
• Gujarat with 246 outlets, followed by
Maharashtra (160), Uttar Pradesh (132),
Andhra Pradesh (129) and Rajasthan (107)
Cont..
• RIL entered the petrol pumps business in
2005
• Selling the fuel at a marginally higher price
compared to the petrol pumps run by
government-owned oil marketing companies
like IOC, HPCL, and BPCL.
• Did good business because of good quality
fuel in the right quantity and provided
customers with additional services like
windscreen cleaning, car washing, etc.
Cont…
• In 2006-07, RIL sold the fuel at a
price matching the government-
owned outlets due to fall in
crude prices in the international
markets
• Gained 14% market share
Year 2005-06
The Industry Observed a Paradigm Shift
Fleet services
Efficient fleet operations
Emergency services
Vehicle tracking
MIS services
Drivers Loyalty
Quality and Quantity Reliance’s Food
Showers and Toilets
Through technology Uniqueness
Secured Parking
Superior customer
experience
Courteous service
Convenient payment mechanisms
Q&Q through use of technology enhanced customer satisfaction.
Quantity & Quality Assurance at Reliance
Company owned and Accurate preset
Replenishment Comprehensive
managed inventory premix deliveries to
system linked to sealing mechanism Central monitoring of bulk
stock monitoring at Vehicle (tanker) 2/3 wheelers
stocks through automatic Electronic
RO monitoring and
tank gauging at the ROs calibration of
Product (tanker) tracking system Online monitoring and
filling by bulk metering assembly
reconciliation of stocks of dispensing unit
meters and
and sales for accurate delivery
automated process
Remote diagnostics of
key components in
dispensing units
Technology based process make Q&Q a reality from end to end in an integrated format
Rewards & Recognitions
Reliance Petroleum Retail
Innovative Retail Concept of the year – Franchise
India Awards 2005
Franchisor of the year – Franchise India Awards
2005
Innovation & Technology in Franchising – (The
Reid & Taylor Awards for Retail Excellence ) at
The India Retail Summit 2005
Retail Concept of the year for Reliance Truck
Stops – Retail Awards at India Retail Forum 2005
Golden Peacock Award in the category of Eco –
Innovation for Truck-Stop as a concept – WEF
Story Changed by mid
2007
Change in Market
• Rise in Crude oil prices
• Differences in the price became
pronounced
• Sales gone down
Competitor’s Analysis
• Public Sector sold the fuel at a price
lower than their cost of production
• Public sector sold the petrol at a loss
of Rs 13.97 a litre and diesel at a
discount of Rs 20.97 per litre.
• Subsidies by the government
• This revenue loss is made up by the
Government through issue of oil bonds
and subsidy share from upstream firms
like ONGC and GAIL
Impact on Reliance
• Increased the Price by 6 Rs for petrol & 14
Rs for Diesel
• For being competitive they sold at a lesser
rate then cost of production
• Lost around Rs.3 on a litre of petrol and
around Rs.6 on a litre of diesel
• One more interesting Fact is Reliance
couldn’t use the fuel from its two refineries
at Jamnagar in Gujarat because they have
been converted into only-for-exports units
Story Ends…
In May 2008, Reliance Industries
Limited (RIL), one of the largest
private sector companies in
India, owned by Mukesh Ambani,
announced that it was shutting
down all its petroleum retail
outlets (RO) after incurring a
loss of Rs. 8 billion in 2007-08.
