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| Sunday, 14 September 2003 |
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LIOC asks consumers to 'be the judge' Lanka IOC Pvt Ltd (LIOC), the wholly-owned subsidiary of Indian Oil Corporation (IOC), will introduce a new service called 'be the judge' from January 1, 2004 where consumers will be able to test the quality of fuel themselves. "We will install the necessary equipment and consumers are free to test the quality of the fuel and see if it satisfies them," said Managing Director LIOC M. Nageswaran. Plans are now underway to complete the refurbishment of the 100 retail outlets owned by LIOC by June 2004. "We have already completed the refurbishment of 23 outlets and the cost of refurbishment per outlet varied between Rs 10 million and Rs 20 million (this investment is in addition to the investment on purchasing the 100 outlets and the common user facility), depending on the location," said Nageswaran. "We want to give the best value to the consumer and make filling a pleasure rather than a routine. Depending on the location and the needs of the consumer, we want to have all modern conveniences such as medical shops, ATMs, IDD facilities and cyber cafes. "Since the 100 retail outlets give us a market share of 15.4 per cent, we are offering incentives to franchise dealers to join our network as the petroleum business needs 'critical mass' to be successful and profitable." He said that IOC has paid a two million dollar advance to purchase the 100 retail outlets and that negotiations are currently going on to determine the balance to be paid on these outlets as well as the value for the 1/3 equity in the common user facility terminal company. "We have not seen the valuation of Ernst and Young, which is the consultant to the Public Enterprise Reforms Commission (PERC), but we have met several times to exchange information and to arrive at certain assumptions so that we could come to an agreeable price, but there was never a pre-determined price. Only the interim agreement was signed in December 2002 with the price to be negotiated subsequently. "I am confident that we would reach an agreement within the next few days," he said. LIOC is committed to reforming and developing the petroleum sector of the country by improving the quality of fuels and healthy competition. Referring to the Trincomalee tank farm, he said out of the 99 tanks there, only 15 are in a useable condition as they have been abandoned for nearly 50 years due to practical reasons. "We are in the process of upgrading these tanks under a phased programme and to date, have invested over Rs 200 million on their refurbishment. Once they are rehabilitated, we intend renting some of them to international petroleum trading companies at rates comparable to those prevailing in the Gulf region and Singapore, thus making Trincomalee an international hub for bunkering. Among other benefits, this will generate more employment opportunities." Speaking of future plans, Nageswaran said LIOC wants to enter the aviation fuel and LPG sectors as it has the capacity for them. In India, IOC services 40 million consumers in the LPG business. "Therefore, we want to bring a pricing formula based on international prices where consumers will get the advantage," he said. IOC, the only Indian company featured among Fortune 500 companies, is the leader in India's downstream oil sector. It accounts for 53 per cent of the petroleum products market share, 41 per cent national refining capacity and 76 per cent of the downstream pipeline transportation work. |
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