New Delhi: The recent award of city gas distribution rights to oil marketing companies such as Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) will help them diversify and maintain their market shares in the domestic cooking and auto fuel markets over the long term, according to Fitch Ratings.
IOC and Hindustan Petroleum Corp Ltd (HPCL) won city gas distribution rights in nine geographical areas each last month, and BPCL got rights to two areas. BPCL won the rights to 11 geographical areas in a previous auction in September 2018 as well.
Fitch said it expects the state-owned oil marketing companies’ increased presence in city gas distribution to help them diversify from their oil refining and marketing business and reinforce their existing strong positions in the auto fuel market, with piped natural gas (PNG) usage gradually competing with auto fuels and replacing liquefied petroleum gas in the domestic cooking fuel market.
