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India’s largest private sector company, Reliance Industries, announced May 6 that it has shut down all of its 1,432 gasoline pumps in the country. The same day, Shell India announced it was closing 15 out of its 50 retail outlets in the Indian states of Karnataka, Tamil Nadu, Andhra Pradesh and Gujarat.
With oil prices soaring above $122 a barrel, India’s energy woes are coming to a head, signaling an uncertain future ahead for the ruling Congress Party.
The closures come as private companies in India’s refining sector are accepting that there are no profits to be made in the domestic gasoline market as long as crude prices continue rising and New Delhi continues its policy of capping fuel prices and heavily subsidizing state-owned refining firms. The bulk of the South Asian country’s gasoline pumps — 34,304 out of 36,936, to be exact — are owned by state-run Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. Private companies such as Reliance Industries, Essar Oil and Shell India own the remainder.
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