NEW DELHI: Reliance Industries’ return to the fuel retailing business is turning out to be a pale shadow of the spectacular debut it made a decade ago, when the company quickly earned consumer confidence and snatched a big market share from state firms. In more than a year since diesel sales were deregulated in October 2014 and private players started reopening outlets, Reliance has gathered only 1.7% market share in diesel sales and 1.4% in petrol, according to industry data for December. In comparison, it had captured 14.3% share in diesel in less than two years last time round before the reappearance of fuel subsidy forced private players’ exit. “This time, it seems their heart and soul is not in the retail business,” said an oil industry executive who had closely observed Reliance’s aggressive moves a decade ago. “They have the resources and the capabilities, but it doesn’t reflect in their market share or the number of outlets.” Reliance has reopened 750 filling stations so far and plans to get its entire network of 1,400 outlets working by March. In comparison, rival Essar Oil has been swifter in expanding with 1,900 outlets already operational. But its share in sales seems disproportionate to the number of its stores, with just 1.7% in diesel and 1.6% in petrol. Essar aims to have 5,000 outlets by 2017. Royal Dutch Shell has about 0.3% share in diesel and 0.9% in petrol sales. “Reliance was initially cautious because of the government’s flip-flop on deregulation in the past. Another thing that has slowed Reliance’s progress in reopening outlets is its relationship with dealers which turned sour following a closure of pumps last time,” said an equity analyst who tracks the oil sector, adding that the company didn’t treat dealers very well last time and that lowered their confidence in doing business with the company once again. Reliance didn’t comment for the story. An Essar executive said faster regulatory approvals were needed to accelerate opening of outlets. Several industry executives said Reliance is currently more focused on the bulk market, which gives good returns without much headache. The company has won key contracts from the railways and other bulk consumers. Reliance and other private players have launched price discounts and loyalty programmes to woo retail customers with limited success. “Reliance is now probably looking for a new unique selling proposition (USP). All that they did then has been replicated by state firms now,” said a former marketing director of a state oil firm, who didn’t want to be named. State firms offer loyalty programmes, focus on fleet owners, undertake aggressive communication campaigns, and have more visually appealing filling stations, automation to check fuel adulteration, and non-fuel facilities such as toilet, convenience stores, ATMs and eateries. In the decade private players stayed out of the game, the industry volumes doubled and the number of outlets grew 70% to 53,000, 95% controlled by the public sector. A decade ago, Reliance’s well-located pumps on highways didn’t only cater to the vehicles on the road but also the farmers and other consumers in rural areas. But state firms have now taken away that business with their rural outlets. “Price discounts, margins for dealers and control over marketing infrastructures such as depot and terminals will be critical in the battle for market share,” said GC Daga, former marketing director at Indian Oil Corp. Reliance and Essar have reported record refinery margins in the recent quarters and can unleash a price war in the retail market, the industry executive quoted earlier said. But they have very few fuel depots, which makes them depend on state firms for supplies at several places. If they can build their infrastructure quickly, they can be a serious threat to PSUs, said the executive. “If they get aggressive, private companies can grab higher market share. Globally, nowhere state firms hold as much market share as they do in India,” said Daga.