RIL, OMCs prepare to push doorstep delivery of fuel

More than two years after the idea of doorstep delivery of fuels was mooted, Reliance Industries (RIL) is preparing to enter the fray. The state-run oil marketing companies (OMCs), on their part, will add at least 500 doorstep fuel delivery vehicles within the current financial year.

The OMCs — Indian Oil, BPCL and HPCL — will soon be issuing advertisements to select interested start-ups and entrepreneurs to enter the field, said a source. Meanwhile, “to take the fuel delivery to customer’s doorstep, RIL is working on next generation business models,” the company noted in its annual report for 2018-19.

Petroleum minister Dharmendra Pradhan had announced the idea of home delivery of fuel in April 2017. Diesel was selected for pilots as it is considered less hazardous compared with petrol once taken out of the licensed area for dispensing into motor vehicles.

To be sure, RIL at present delivers diesel in packaged containers mostly for telecom towers. It has all the requisite regulatory permits for launching diesel in high-density polyethylene packs, said the annual report. The state-run OMCs have conducted door-to-door pilots in 30 places instead of the authorised 50 locations as there has been reluctance from various corners. While the Petroleum and Explosives Safety Organisation (PESO) — the organisation responsible for safe distribution of petroleum products — wanted start-ups to remain under the supervision of OMCs and come through the three companies for permissions, OMCs wanted the start-ups to tie up with dealers directly.

“Dealers are reluctant as it will mean their market share will go down in that area, and there is investment involved. Not many dealers are ready to make the investment in door-to-door delivery mechanism,” said the source.

There were also issues regarding filling of delivery trucks. OMCs wanted the trucks to be filled from existing dealers as otherwise the trucks would have required to travel to terminals.

To cut the clutter, the Ministry of Petroleum and Natural Gas has now put its foot down and asked OMCs to come up with necessary guidelines by the start of August. The ministry is of the view that the doorstep delivery mechanism will provide convenience to citizens. Around 3.5 crore transactions for buying diesel and petrol take place daily across petrol pumps in the country.

The push from the ministry is likely to augur well for start-ups which have been itching to enter the segment. In June 2017, Bengaluru-based start-up ANB Fuels started home delivery of petrol and diesel under the brand, MyPetrolPump. PepFuel is another start-up which has signed a tripartite agreement with Indian Oil for doorstep delivery of fuel.