Reliance, BP ink deal to set up fuel retail stations under Jio-BP brand

Mukesh Ambani-led Reliance Industries on Monday said its joint venture with BP will sell fuel under the Jio-BP branding. The two companies entered into an agreement relating to formation of the joint venture on Monday, RIL said in its statement.

In August, RIL announced a joint venture with BP for its fuel retail business in India. The company on Monday disclosed further details on the planned joint venture.

"BP and RIL today signed a definitive agreement relating to the formation of their new Indian fuels and mobility joint venture. This follows the initial heads of agreement signed in August this year," RIL said in a statement.

The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals. The joint venture will include an India-wide fuels retail service station network and aviation fuel marketing business.

RIL will also transfer ownership of its existing Indian fuel retail network and access to its aviation fuel business to the new joint venture. The company at present operates 1400 retail outlets and 30 aviation fuel stations in India.

"The venture expects to expand from RIL’s current fuel retailing network to up to 5,500 retail sites and 45 aviation fuel stations over the next five years to become the most preferred provider of automotive and aviation fuels," RIL said in its statement.

In addition to fuels,the joint venture will also offer other convenience and services. Part of its product portfolio will include Castrol lubricants. BP is Castrol's parent organization. “Castrol lubricants will be available across the venture’s network,” the statement said.

“BP and Reliance are combining their knowledge, expertise and experience to provide Indian consumers world class products and services. We believe that together we will bring solutions that will benefit the fast-growing Indian market," said Mukesh Ambani, chairman and managing director for RIL.

RIL will hold 51 per cent stake in the new joint venture, with the remaining to be held by BP. RIL, in August, said the 49 per cent stake in valued at Rs 7,000 crore.

“This major expansion of our business here reinforces our long-term commitment to India,” said Bob Dudley, group Chief Executive of BP.

For the July-September 2019 quarter, RIL reported double-digit volume growth in both diesel and petrol, while growth at the industry level saw a decline in both petrol and diesel. The company pegged volume growth for high speed diesel (HSD) at 14-15 per cent and for petrol at 17 per cent year-on-year.