8/14/2019 Case Study Ril Petrol

1/13

Case Study: Reliance Petroleum Retail

By: GarvitGargIIPM, Bangalore

Industries Limited

8/14/2019 Case Study Ril Petrol

2/13

Case Description

RIL had accounted for around 3% of the totalpetrol pumps operated in the country.

Owned 1432 pumps

900 were owned by the company and theremaining were dealer owned

Gujarat with 246 outlets, followed byMaharashtra (160), Uttar Pradesh (132),Andhra Pradesh (129) and Rajasthan (107)

8/14/2019 Case Study Ril Petrol

3/13

Cont..

RIL entered the petrol pumps business in2005

Selling the fuel at a marginally higher pricecompared to the petrol pumps run bygovernment-owned oil marketing companieslike IOC, HPCL, and BPCL.

Did good business because of good qualityfuel in the right quantity and providedcustomers with additional services likewindscreen cleaning, car washing, etc.

8/14/2019 Case Study Ril Petrol

4/13

Cont

In 2006-07, RIL sold the fuel at aprice matching the government-owned outlets due to fall incrude prices in the internationalmarkets

Gained 14% market share

8/14/2019 Case Study Ril Petrol

5/13

8/14/2019 Case Study Ril Petrol

6/13

Quantity & Quality Assurance at Reliance

Replenishmentsystem linked tostock monitoring atROProduct (tanker)filling by bulk

meters andautomated process

Comprehensivesealing mechanismVehicle (tanker)monitoring andtracking system

Company owned andmanaged inventoryCentral monitoring of bulkstocks through automatictank gauging at the ROsOnline monitoring andreconciliation of stocksand salesRemote diagnostics of key components indispensing units

Accurate presetpremix deliveries to2/3 wheelersElectroniccalibration of metering assembly

of dispensing unitfor accurate delivery

Technology based process make Q&Q a reality from end to end in an integrated format

8/14/2019 Case Study Ril Petrol

7/13

Rewards & RecognitionsReliance Petroleum Retail

Innovative Retail Concept of the year FranchiseIndia Awards 2005

Franchisor of the year Franchise India Awards2005

Innovation & Technology in Franchising (TheReid & Taylor Awards for Retail Excellence ) atThe 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

8/14/2019 Case Study Ril Petrol

8/13

Story Changed by mid2007

8/14/2019 Case Study Ril Petrol

9/13

Change in Market

Rise in Crude oil prices

Differences in the price becamepronounced

Sales gone down

8/14/2019 Case Study Ril Petrol

10/13

Competitors Analysis

Public Sector sold the fuel at a pricelower than their cost of production

Public sector sold the petrol at a loss

of Rs 13.97 a litre and diesel at adiscount of Rs 20.97 per litre.

Subsidies by the government This revenue loss is made up by the

Government through issue of oil bondsand subsidy share from upstream firmslike ONGC and GAIL

8/14/2019 Case Study Ril Petrol

11/13

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

couldnt use the fuel from its two refineries

at Jamnagar in Gujarat because they havebeen converted into only-for-exports units

8/14/2019 Case Study Ril Petrol

12/13

Story Ends

In May 2008, Reliance IndustriesLimited (RIL), one of the largestprivate sector companies inIndia, owned by Mukesh Ambani,announced that it was shuttingdown all its petroleum retail

outlets (RO) after incurring aloss of Rs. 8 billion in 2007-08.

8/14/2019 Case Study Ril Petrol

13/13