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The acquisition of IBP by Indian Oil Corporation puts the already formidable IOC on a better footing. The company that has created records with the highest sales figures ever in the Indian business scenario is all set to reach new heights.
Indian Oil Corporation (IOC), the leading oil refining and marketing company, occupies a place of pride in the Indian industry as a whole. It is one rare example of a company doing extraordinarily well in spite of the notorious State ownership. For years now, IOC has been consistently delivering to the expectations of investors and shareholders. The fact that it has been the one and only Indian representative in the coveted list of Fortune 500 companies speaks volumes about its merits. In 2001, for the seventh consecutive year, IOC was ranked in the Fortune 500 list. It was ranked 209th in 2001, 23 steps ahead of the previous year's position of 232. The company was also ranked 112th in the Forbes's ranking of "Forbes International 500 Companies".
The main purpose of its creation was to supply petroleum products of Indian Refineries Ltd to various locations in the country. In order to ensure co-ordination between Indian Refineries and the Indian Oil Company, the two were amalgamated to form Indian Oil Corporation Ltd in 1964. The company operates 7 of the country's 15 refineries, with a combined capacity of 31.2 mtpa (metric tonnes per annum). Out of IOC's seven refineries the one located at Haldia (capacity 4 mtpa) processes imported crude entirely. Among others, Guwahati and Digboi refineries use only domestic crude. The other refineries located at Barauni, Bihar (4.2 mtpa); Gujarat (12 mtpa); Mathura, Uttar Pradesh (7.5 mtpa); and Panipat, Haryana (3.5 mtpa) use partly imported crude and partly domestic crude (depending on the availability of domestic crude). Seventy percent of IOC's sales are under controlled prices and include items such as petrol, diesel, kerosene, LPG (Liquified Petroleum Gas), all processed from crude oil. IOC has over 19,000 sales points, including 13,000 retail and 6,000 consumer points. The company boasts of 192-lakh LPG customers in 1,355 cities in the country.
IOC's refineries are strategically spread across the country. Its products include lubricants and greases, wax/bitumen, asphalt/lube oil drums and propylene recovery units. It is the market leader in the lube oil and lubricants segments with over 32 percent market share. It is the largest and most dominant player in the petroleum sector. IOC commands more than 50 percent of the market for petroleum products in India and owns and operates the largest network of crude and petroleum product pipelines in India. With the commissioning of Sonepat-Meerut branch line of Mathura-Jalandhar pipeline during 2000-01, the pipeline network has been expanded from 6453 km to 6523 km with an overall capacity of 43.45 million tonnes per annum. That accounts for more than 80 percent of the total pipeline capacity in the whole country. This huge network of pipelines is going to be a major advantage in favor of the company after the deregulation process. Even private players would need to purchase the access to different points across the country through this pipeline. The company is expected to reap good revenues as product prices move up in a phased manner.
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