However, one year later, when the market opens up, BPCL and IOC to a certain extent will gain. BPCL will then have increased economies of scale for production, better distribution and increased sales and volume. And with these moves, it will become very difficult for smaller players to survive. Infrastructure will become a major entry barrier for them. The restructuring exercises in these government monoliths will result in greater consolidation and fewer players in the market by the time the sector is thrown open completely.
Today there are over ten companies in the sector.
A year later there might be just three or four left. These moves will help push the de-regulated products when the sector is opened up. And when the international companies finally come in, they will have to reckon with increased product security and a wider marketing network that the giants are now establishing. There is absolutely no downside. Volumes are not going to fall.