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BPCL and IOC looking at acquiring Shell India's domestic retail outlets?  

Stocks of oil marketing companies (OMCs) are trading weak led by BPCL, HPCL and Indian Oil Corporation (IOC). A leading business daily has reported that OMCs BPCL and IOC are looking at acquiring some of Royal Dutch Shell Plc's Indian subsidiary, Shell India's domestic retail outlets. Shell India has reportedly put up 20 of its 80 retail outlets for sale. In addition, it also has put up certain sites, which it had acquired earlier for setting up such outlets, for sale. This move is despite the recent deregulation of petrol prices. Apart from the fuel price deregulation, this move would make sense for Indian OMCs as they would be able to acquire retail outlets in urban markets, where volumes are comparatively higher. It may be noted that it costs nearly Rs 1.5 to Rs 2 m to set up a low-cost retail outlet in rural areas. However for setting up a retail outlet in metros, the cost shoots up to nearly Rs 10 to Rs 40 m. In addition to the cost of setting up a new outlet, acquiring land for the same is a difficult task by itself.,-energy-stocks-out-of-favour

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