Automation allows the Indian Oil Corp. (IOC) to closely monitor fuel inventory levels and sales on a real-time basis. Fuel adulteration—blending of kerosene and naphtha with diesel and petrol respectively—is partly a result of loose inventory control by oil companies. "IOC also proposes to install global positioning system (GPS) systems on its vehicles transporting fuel from storage depots to trucks," IOC Chairman and Managing Director Sarthak Behuria said.
In the first phase, IOC plans to cover 1,000 retail outlets and expects to cover 1,200 petrol pumps by the end of fiscal year 2007, which ends March 31, 2007. The network of automated outlets will eventually reach 1,800—these petrol pumps account for about 70 percent of Indian Oil's retail sales. The total cost incurred by the company on the automation project is $85 million.
IOC has already automated several plants and processes at its refineries and is now into automation of its retail business. "Depending upon the needs, usually the corporation spends 5 percent to 8 percent on automation in refinery processes," said A. M. Uplenchwar, director (pipelines). The country's largest state-owned refining and marketing oil company has plans to be a $50 billion global integrated company by 2011-2012.
The IOC program is in line with the direction laid out by the Indian government. In order to beat competition and curb adulteration, the Petroleum Ministry of India has asked the state-owned oil marketing companies (OMCs)—Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp.—to make use of technology for automation of retail stations, similar to the private sector oil companies.
The OMCs were advised by the Ministry to complete the automation of their retail outlets (ROs) by March 2007. This would not only help in strengthening their institutional mechanism, but also check adulteration, a Ministry official said. Adulteration of petrol and diesel on transport fuel has been a serious cause of concern. The Ministry has been maintaining that the possibility of adulteration of these two products cannot be ruled out due to huge price difference between petrol/diesel and various adulterants available in the market, and the easy miscibility of these products.
The Petroleum Ministry felt that while the companies have expanded their RO network, adequate attention has not been paid to improving the institutional and technological mechanisms. This has resulted in not only reduction in their average throughput per RO but also complaints of malpractice. The Ministry has also asked the companies to install global positioning system (GPS) equipment for monitoring the movement of tank trucks by March next year.