According to the business publication, the company is concerned that the US, European and African fuel retail markets are already dominated by a number of global oil giants, and that competing with such players would involve sizeable investments in brand establishment. In addition, southeast Asia is less attractive to the company because of the subsidized markets.
The Business Standard reported that, although Indian Oil Corporation (IOC) is the largest petroleum products manufacturer in its domestic market, it has been less successful in its attempts to expand its operations overseas. Indeed, its Sri Lankan subsidiary, Lanka IOC, booked a substantial net loss in fiscal 2006/07.
The publication cited an unnamed IOC senior official as stating: Our experience in Sri Lanka has forced us to reconsider the plans of starting retail operations in southeast Asia as auto fuels are subsidized in these countries. We do not want to get caught in the subsidy web again.
However, the Business Standard reported that IOC will continue to observe the southeast Asian markets, with a view to commencing operations in Malaysia and Indonesia once the subsidy regime has been abandoned.
