New Delhi, Oct. 5: Reliance Industries, Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MRPL) are planning to re-enter fuel retailing as diesel decontrol appears imminent.

PSU oil companies are making a profit of Rs 1.90 per litre on diesel from the beginning of this month. The profit is expected to increase with the slide in global crude prices and the stability in the rupee-dollar exchange rate.

Diesel prices are likely to be deregulated after the state Assembly polls by the middle of this month.

MRPL, a subsidiary of ONGC, plans to commission 500 retail outlets in the next four years in a tie-up with Total of France from two.

Essar Oil plans to more than double to 3,000 from 1,400 in three years. “Essar Oil has about 1,400 outlets across the nation, with over 300 in various stages of commissioning. We are now working to restart diesel sale from our outlets in phases,” company officials said.

Sources in Reliance Industries, which had set up around 1,100 pumps, said the company would wait till the deregulation before reopening its outlets. “Let the deregulation happen and let’s see how the government goes about it. We need to have clarity on whether market prices will continue if the global rates go up because of the tensions in West Asia or subsidy will again come into play,” they said.

Market pricing of diesel is essential for the efficient operation of fuel retail.

Diesel accounts for 44 per cent of the total consumption of petroleum products in the country. It constitutes around 85 per cent of total sales at petrol pumps across highways and nearly 50 per cent of sales at fuel stations nationwide. Its consumption has risen 35.52 million tonnes within a decade.

At present, PSU oil-marketing companies (OMCs) have around 42,000 outlets. Non-PSU players, including RIL, Essar Oil and Shell, have about 3,000 outlets, of which very few are operational.

“Private players can capture around 10 per cent market share over the next two years, which could impact OMCs profitability very marginally,” analysts said.

During the brief period of deregulation in 2002, the market share of private players had reached 5 per cent in petrol and 10 per cent in diesel. They shut down most of their outlets after the restoration of government control on prices, which allowed PSU retailers to sell at a cheaper price because of subsidy.

However, it will not be a smooth ride for the private players this time. Over the last decade, the PSU retailers have doubled outlets and modernised them to ensure customer engagement, a report by Motilal Oswal said.

It remains to be seen whether the government will completely align the diesel prices with the global market rate, or continue to have a say on the price.