HPCL is a Government of India Enterprise with a Navratna Status, and a Forbes

2000 and Global Fortune 500 company. It had originally been incorporated as a
company under the Indian Companies Act 1913. It is listed on the Bombay Stock
exchange (BSE) and National Stock Exchange (NSE), India.
HPCL owns & operates 2 major refineries producing a wide variety of petroleum fuels &
specialties, one in Mumbai (West Coast) of 6.5 MMTPA capacity and the other
in Visakhapatnam with a capacity of 8.3 MMTPA. HPCL also owns and operates the
largest Lube Refinery in the country producing Lube Base Oils of international standards,
with a capacity of 428 TMT. This Lube Refinery accounts for over 40% of the India's total
Lube Base Oil production. Presently HPCL produces over 300+ grades of Lubes,
Specialities and Greases. HPCL in collaboration with M/s Mittal Energy Investments Pte.
Ltd.. is operating a 9 MMTPA capacity Refinery at Bathinda in Punjab and also holds an
equity of about 16.95% in the 15 MMTPA Mangalore Refinery and Petrochemicals Ltd.
(MRPL).
Click here to view the financial results of HPCL.
HPCL has the second largest share of product pipelines in India with a pipeline network
of more than 2,500 kms for transportation of petroleum products and a vast marketing
network consisting of 13 Zonal offices in major cities and 101 Regional Offices facilitated
by a Supply & Distribution infrastructure comprising Terminals, Pipeline networks,
Aviation Service Stations, LPG Bottling Plants, Inland Relay Depots & Retail Outlets, Lube
and LPG Distributorships.
Consistent excellent performance has been made possible by highly motivated workforce
of over 11,000 employees working all over India at its various refining and marketing
locations. View Past Annual Reports to know more about HPCL. The RTI Information
Manual provides various details about the operation of the Corporation.
HPCL is committed to achieve the economic, ecological & social responsibility objectives
of sustainable development consistently through varied operations and activities. HPCLs
focus areas are in the fields of Child Care, Education, Health Care, Skill Development &
Community Development, touching lives of weaker section of society.

The beginning of oil and gas industry in India can be traced back to 1867 when
first oil well was stuck at Makum near Margherita in Assam by a group of laborers
while laying railway tracks for the Assam Railway and Trading Co. Oil retailing in
India started in the year 1882 by Standard Oil Company of USA. They used to
retail kerosene in the country. In the year 1959, Indian Oil Ltd. was registered as
the first marketing company of India. Initially all the activities related to the
Petroleum Business be it exploration, refining, distribution or selling were strictly
regulated and protected by the government but after April 2002 with the

dismantling of APM (Administered Price Mechanism) private sector companies

were also allowed to operate in the Indian market.
Before dismantling of APM, the Indian petroleum market was ruled my public
sector oil marketing companies, there were no competition in terms of price and
quality of the product, they all were selling same product at the same price,
customer was indifferent towards them, and there were no competition in the
market. For these OMCs, marketing was just the strengthening the distribution
network and increasing the number of outlets at different geographic locations in
their network. After the APM was dismantled in the April 2002, government of
India allowed FDI up to100% in exploration of oil and natural gas. The private
sector companies who owned and operating refineries with an investment of at
least Rs 20 Billion or was in the exploration and production of at least three
billion tons of crude oil was entitled to the marketing rights for the transportation
fuel. This fuels up the competition in the oil retailing market. With the entry of
private and multinational companies, the national oil companies have no other
options but to compete with these companies and the PSU started feeling the
need to find out the means to attract more and more number of customers
towards themselves by providing facilities like automated fuel filling and petro
card and other allied services which was started by private Oil Marketing
Companies (OMC). Increasing oil prices also forces these companies to look out
for some additional source of revenue as they are restrained from increasing oil
prices. Following the trend in the international market these PSU giants started
tying up with various companies to promote forecourt retailing or NFR. The trend
in the international market shows that the most preferred sector is FMCG and
Fast food and so these companies started alliances with various FMCG and fast
food giants. BPCL signed up deals with Mc Donald, Nirula restaurants and started
In & Out convenience store at various petrol pumps. IOCL also started looking
forward in NFR and did a partnership with Appllo pharmacies, Subhiksh,
Crossword and Caf Coffee day.
Though globally, the petrol pump base convenience store have developed into a
large business in India OMCs are marking less than 5 % of their revenue from
NFR services but globally this margin is very high. As per the data monitor report
non- fuel sales constitute about 40% of the industry total value in the US market
and in France and Japan, the share of non fuel sale is 12.5% and 11% in France
and Japan respectively. Hence a need to understand the behavior of the Indian
consumer towards these NFR services arise.

Indian Retail Petroleum Industry

The Indian petroleum retailing sector is witnessing significant changes that is
altering the nature of competition faced in this sector. Major drivers for these
changes are:

Growth in Demand: Growth in demand for fuels in all segments.

Deregulation of Market: Phase wise deregulation of subsidized fuels.
New Customer Expectations: Customers seeking convenience.
Because of these factors, the industry will again see entry of large private sector
entities like Reliance Industries, Shell India & Essar in this highly competitive
market where the product is more or less same & there is very less scope of
differentiation on the basis of product because the product quality norms are set
by government. Public Sector Oil Marketing Companies (OMCs), who dominate
the market currently, are now increasingly becoming customer centric in their
outlook to protect market share in near future when the new entrants arrive.
Non-fuel retailing (NFR)/Allied Retail Business (ARB)
Non-fuel retailing/Allied Retail Business refers to selling of non-fuel products and
services along with fuel at the retail outlets (filling stations). Non-fuel retail
feature includes retail stores, food joint, coffee shops, auto service stations, pay
telephones, ATMs etc.
Globally, non-fuel retailing plays a crucial role in overall revenue and profitability
of a filling station. According to report from a leading research firm, non-fuel
sales constitute around 40 percent of the industrys (fuel service stations) total
value in the US market. The share of non-fuel retail in total sales in Japan and
France is 12.5 percent and 11 percent respectively. Whereas in India, this
accounts for even less than 2% of total sales at retail outlets. In India, the
margins for both dealer & OMCs are extremely thin on fuel retailing. Using the
available real estate for non- fuel sales can significantly improve the margins for
all stake holders.
Non fuel retailing has following main advantages for operating company:
Retail outlets with non-fuel products and services help oil retailers to
strengthen their brand image and also help them in providing superior
experience to customers. This enhances retention of customers as well adds new
customers. Generates additional stream of revenue for oil companies as they
receive revenue in the form of rental income by leasing space for retail outlets
and via profit-sharing arrangement with dealers. Helps push fuel sales (fuel
rub-off) of the fuel as the buyers who come to buy products from convenient
store are likely to opt for fuel purchase as well. Average Ticket size of a fuel sale
in an ARB Outlet is usually higher than in an Only Fuel Outlet. Attracting &
retaining customers as customers may prefer some other brand but walk in to a
particular retail outlet just because of the NFR offering. Better site value
utilization (Using the free space available).
In India, Non-fuel retailing is in the growth phase. Brought on a level-playing field
by deregulation of petrol prices, these companies, public and private sector alike,
are roping in noted non-fuel retail brands at their retail outlets amid rising
competition. For instance, oil retailing public sector unit (PSU), Indian Oil

Corporation (IOC) recently joined hands with quick service restaurant (QSR)
chain, McDonald's to set up its retail food chains at its petrol pumps. Further,
private sector oil retailer, Essar Oil Limited (EOL) has also entered into
partnerships with over 20 non-fuel brands including Amul, Pepsi, Western Union
Money Transfer and Bosch to enhance its brand value and attract increased
customers to its petrol pumps.