NEW DELHI: British energy major BP is looking at expanding its footprint in India’s fuel retail and mobility solutions market as the world bets on the third-largest economy in terms of purchasing power to lead the recovery in energy demand in the post-Covid scenario.
According to BP chief executive Bernard Looney, the company’s joint venture with Mukesh Ambani-led Reliance Industries Ltd (RIL) will over the next 4-5 years add 5,500 fuel retail outlets that will also offer new-age mobility solutions such as charging facilities for electric vehicles.
“India is an extraordinary country with an extraordinary history, an extraordinary group of people, and with extraordinary ambition,” Looney told India Energy Forum-CERA Week on October 26, pointing out the country has a growing population and an ambitious agenda to cut emissions that were “very, very compelling”.
The expansion plan is not new as it was articulated at the time of announcing the joint venture with RIL for selling motor and jet fuels in August 2019. But Looney’s reiteration of the plan signals the global oil industry is pinning its hopes on India to recover from the pandemic’s destructive impact on energy demand.
In his concluding remarks on Wednesday, oil minister Dharmendra Pradhan said pointed out that the fact that prime minister Narendra Modi inaugurated the forum shows his government’s emphasis on securing India’s energy architecture. “We are at such a point when we have to assess the impact of Covid-led disruptions to global energy sector supply chains and calibrate our approach towards strengthening of India’s energy sector.”
As reported by TOI on October 13, the International Energy Agency’s World Energy Outlook 2020 earlier this month said India will lead the recovery in global energy demand. Modi had underlined this while inaugurating the IEF on October 26 by telling policymakers and captains of the energy industry that, “India is set to nearly double its energy consumption over the long term.” India’s petrol and diesel demand shot past pre-Covid levels earlier this month.
No wonder Looney made the industry’s vote of confidence in India amply clear when he said: “Why is India important? Because it is India.” For good measure, he added that India will be the fastest-growing fuel and lubricants market in the next 20 years, while the country’s energy mix will see coal’s dominance fall from 50 per cent to 40 per cent as natural gas and renewables will grow.
Patrick Pouyanne, CEO of French major Total SA, joined Looney in describing India “as one of the world’s largest markets for energy” but pointed out that per capita consumption was just 30 per cent of the global average, which offered “huge potential”. “We want to be an important part of India,” he said, adding the French group is investing in setting up liquefied natural gas import terminal, city gas networks and renewable energy projects in the country.
But Looney also had a word on the “complexities” of the Indian market, especially omission of natural gas from the GST regime, in spite of the slew of reforms carried out by the Modi government.
The BP chief said the fuel retail network expansion will create some 80,000 jobs. The joint venture, Jio-BP, has taken over RIL’s 1,400 functional petrol pumps and 31-odd aviation fuel stations at airports. The venture also intends to raise the number of aviation refuelling points to 45.
RIL holds 51 per cent in the joint venture and BP 49 per cent. BP paid about Rs 7,000 crore to acquire the 49 per cent stake. This is the third joint venture between Reliance and BP since 2011.