- June 18, 2021
- Posted by: Admin
Will the petrol pump be out of business by 2030 ?
Electric adoption is surely the buzz word with more support from the government under FAME-II and environmental awareness is surely pushing customers to try electric vehicles especially in the 2W and 3W category with marginal jump in 4W.
While the adoption is more in the 3W category as commercially, it makes more sense to the driver as there are lot of savings compared to CNG/Petrol options. However the big question here is will the petrol pump be out of business by 2030 ?
The sales of registered electric options especially in 2W in 4W have been flat in last 2 years, while there is a lot of tractions happening in those below 25KM/HR for 2W where registration is not required. A lot of senior citizens and housewives have started trying this option.
Definitely there is a lot of positive words around electric adoption hence suddenly in 2W alone there are over 500 manufacturers located in different parts of the country and all trying to push their products, even though many have sold less than 500 units for the whole year. The Big guys such as Honda, TVS, Bajaj are going slow while only Hero have managed to make a clear road towards offering electric products in the market under the Hero Electric banner.
For customers convenience is a big factor since petrol offers fuel fill in less than 90 sec. The charging time currently taken is over 2 hours, and with very few charging stations, a customer is expected to charge at home or office. Battery swaps is also an alternative for charging however currently there is no standardisation on battery, it is very difficult to predict what type of battery can come for swaps. Also there is huge capital cost to put a charging swap station.
With over 60% taxes between the state and central the revenue from fuel sale is a significant contribution to the government’s kitty with electric as an option. It doesn’t look likely there is an alternative to this revenue since a good proportion of government’s spend is based on this revenue.
For pumps owner too with 3%+ margin on each ltr it is great earning at the shortest time compared to battery charging or swap operations, The pump owner might rather convert his real estate it to a more profitable business.
Overall to sum-up it doesn’t look like by 2030 the petrol pump will be out of action, but surely there will be tough competition between electric and IC engine manufacturers with better fuel efficient and low emitting vehicles and also between charging stations and petrol pumps on higher margin offering at shortest time.