However, till date both the efforts have yet to see any significant traction at the ground level. The recent tenders for 78,000+ new pumps as well as allowing Non-Oil Companies to open pumps are a step in this direction. The OMCs and the government have anyways been trying to reduce their Capex and Opex spend on the pumps.

In 2019, India had approximately 65,000 petrol pumps of which approximately 60,000 are either owned or run by IOCL, BPCL and HPCL. Historically, a large proportion of the pumps in India have been Capex funded by the three large state owned OMCs (Oil Marketing Companies), which as a model is not sustainable going forward from an investment point of view. Structurally, the current fuel distribution model for automotive fuel through petrol pumps is difficult to scale at a rapid pace. In addition, despite a near 55% drop in Brent crude futures from the peak in January 2020, diesel prices in India have dropped only 10% and petrol prices only 8.5% (New Delhi rates). As a result, fuel prices have remained largely unchanged over the last month. The depreciation of the Indian Rupee is also not helping the situation as India is a large importer of fuel. Fuel sales in India were down 18% in March 2020 (LPG being the only fuel that saw a spike) and are expected to be 60-66% down in April 2020, if not more. However, that has been offset to a large extent by the significant slump in demand due to the six week lockdown in India. On the one side, the prices of Brent Crude are at a low which post 2004 was last seen briefly only in 2016. This is due to a multitude of factors including, but not limited to, the global supply chain & economics of fuel trade, structural contraints of the exisiting distribution model, changing buying behavior of consumers and technological disruption. Since, then this model has grown rapidly across the country and will probably scale up even faster in the post-Covid era. In our last article (Aug 2019), we spoke about the launch of вЂњHome Delivery of Fuel in IndiaвЂќ in 2018 by the Ministry of Petroleum & Natural Gas (MoPNG), in partnership with startups like FuelBuddy, under the aegis of IOCL, BPCL and HPCL.

The whole world has come to a standstill and is reeling under the impat of government imposed or self imposed lockdowns. Never before has the world seen such a disruption post the Spanish Flu and WWII. This practice of delivering fuel directly to the end consumer in small trucks continued till gas stations became mainstream and started sprouting all over US.Д¬oming back to the present, the world, as we knew it, has completely changed over the last couple of months and the hypothesis is that we are entering a new normal where the social, cultural, economic and business behaviors will undergo a paradigm shift. However, a few enterprising salesmen sold fuel from pushcarts equipped with hoses which later transformed to (mini) trucks with hoses. Before the advent of the first gas stations in US around 1905, fuel was sold in pharmacies or general stores.

Scope of petrol pump management system