As more prefer personal over public transport, highway petrol sales up

For Bharat Petroleum Corporation Ltd (BPCL), the country’s second largest fuel retailer, retail outlets along the highways account for nearly 50 per cent of its petrol sales now, from under 30 per cent prior to the pandemic. For Hindustan Petroleum Corporation Ltd (HPCL), this number is now over 40 per cent from around 25 per cent pre-pandemic.

“After the pandemic, retail outlets along the highway accounting for almost half of our petrol sales. Until 2019, the share of highway stations used to be between 25 to 30 per cent in petrol (sales),” a senior official with BPCL told The Indian Express.

The company is the country’s second largest public sector refiner and fuel retailer. The three OMCs, Indian Oil Corporation Limited (IOC), BPCL, and HPCL, together account for around 90 per cent of the share in India’s fuel retail market.

Petrol is the second-most consumed fuel in India after diesel and its demand recovered rapidly after the pandemic. In fact, India’s petrol consumption has already surpassed pre-pandemic levels, underscoring the renewed preference for personal mobility among Indians.

In April-February of 2022-23, India consumed 31.87 million tonnes of petrol, according to the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas. In all of 2019-20, India’s petrol consumption was 29.98 million tonnes.

Traditionally, fuel retail outlets along highways have been major points of sale for diesel, catering mainly to commercial vehicles. While diesel sales at these pumps continue to be strong, the rapid rise in petrol demand along the highways can be attributed to an increasing number of travellers opting to use their personal vehicles or rented cars for interstate travel, instead of trains and buses.

Other factors contributing to the trend, experts said, include: improvement in highway connectivity and road quality; rising penetration of vehicles powered by compressed natural gas (CNG) and electric vehicles in cities; and increasing number of fuel retail stations in peripheral areas of cities along highways.

“There is not a lot of scope for expanding the footprint of retail outlets in crowded parts of cities, and most of the new pumps are now coming up along the outskirts and highways. Fuels like CNG are now getting popular even in the personal mobility segment in cities and EV adoption is also on the rise. All of this is feeding into the trend as well,” said a senior official working with the fuel marketing division of HPCL.

In case of HPCL, highway fuel bunks now account for over 40 per cent of the company’s overall petrol sales, up from about 25 per cent prior to the pandemic, the official said.

For IOC, the country’s largest fuel retailer, highway fuel stations already accounted for over 40 per cent of its petrol sales even in 2019 and the rise after the pandemic has been marginal. But company officials attribute it to its relatively well-established retail presence on highways as compared to BPCL and HPCL, leading to a high-base effect.

A top IOC official, however, acknowledged the trend of  rising petrol sales along highways at the industry level, attributing it primarily to an “enhanced preference for personal mobility” for interstate travel.

“It is clear that after COVID-related restrictions on movement were done away with, a large number of travellers had shifted to private transportation even for longer distances than what we saw earlier,” the IOC official said.

The rise in inter-state and inter-city travel using hired cars was also highlighted by cab aggregator Uber in February. Pointing at the buoyancy in its inter-city bookings in 2022, Uber said that the maximum number of such rides were for leisure travel and family visits, followed by business travel and meetings, visits to places of worship, and return trips to and from educational institutions.