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Boosting profitability of non-fuel retail in India

February 23, 2023 5-MINUTE READ


In brief

A strategy revamp can help pave the way for OMCs to address shortcomings and prepare themselves for the current times.

OMCs can also develop partnerships with multi-brand aggregators to secure a robust supply chain network, completely outsourcing backend logistics and inventory management.

OMCs must take a well-planned, data-based approach to network planning, assortment mix, and store format selection in place of gut-based decision-making.

Increase in-store footfall by offering click-and-collect options. Also, leverage on the extensive network for LPG cylinder delivery at the customer’s doorstep.

Use technology while designing the forecourt by using 3D models of the outlets to simulate the movement of different vehicle segments.

Engage with the local communities and quickly adapt to their changing tastes, by leveraging micro-market data and engaging on social media.

Launch own non-fuel brands (e.g., food-on-the-go) to control prices and earn higher shares or margins. Also synergize their lubricant brands with the vehicle care proposition.

The anticipated roadmap for the fuel retailing industry for the next ten years has been summarized as follows:

0-5 years

  • Expansion of fuel station network with both public and private companies
  • Limited players with fuel retail license
  • Stagnant average outlet sales
  • Conventional fuel as the main source of income
  • NFR at nascent stage with OMCs experimenting with various operating and business models

5-10 years

  • Beginning of fuel network consolidation with less prof­itable dealers exiting the business
  • More intense competition with smaller and non-Oil & Gas companies entering the market
  • Declining average outlet sales
  • Gas and bio-fuels as signi­ficant portion of the income
  • NFR with success stories but continues to evolve

The onset of alternate mobility solutions has started to transform the oil marketing industry. The winners and losers will be decided by their ability to adapt to the changing environment and successfully diversify the value streams.

Hari Shankaranarayanan

Managing Director, Lead – Energy, Accenture in India

Tarun Jain

Managing Director – Energy, Accenture in India

Ashok Gopinath

Managing Director, Lead – Technology – Resources, Accenture in India

Divyansh Raghuvanshi

Business Strategy Manager – Energy, Accenture in India


Vishal Reddy

Business Strategy Consultant – Energy, Accenture in India