Most businesses have been hit hard by the coronavirus pandemic but there are a few riders of the storm and doorstep fuel delivery is one them. Business to Customer (B2C) segment inquiries has shot up manifold for the fuel delivery companies.
Doorstep delivery as a business in India is at a nascent stage and a very minuscule part of the energy business chain. The companies are now however betting big on consumer acquisition as they hope the COVID-19 led lockdown will be what demonetisation was for digital payment companies.
The idea of fuel delivery was mooted by Minister for Petroleum & natural gas Dharmendra Pradhan in the year 2017 and the ministry had set a target of 500 fuel delivery vehicles in FY20. Even though the target was missed and only diesel is delivered to the doorstep currently, the business is picking up at a fast pace.
Fuel delivery companies have witnessed about 50 percent reduction in demand for the B2B segment of the business but have seen massive interest in B2C for diesel delivery during the lockdown. The demand has mainly shot up for hospitals for filling up their ambulances and generators, housing societies and small scale industries for diesel-run generator sets.
Delhi based FuelBuddy which is an app-based diesel delivery company with an average business of 500 KL a month in the B2B segment has suddenly seen massive interest in diesel delivery from the B2C segment during the lockdown. Having started the B2C business on the back of COVID-19 situation worldwide in March this year, the company acquired about 60 new customers and in the month of April so far it has acquired 100 new customers alone. FuelBuddy has also launched 20-litre cans especially for small quantity users in residential areas along with LPG delivery. The company sells an average of 1,000 litres per day for B2C segment and expects to scale up to 2,000 litres per day for B2C segment in the short term. At a company level the company plans to scale up to 2500KL per month in the next 12-15 months from the current 500KL per month.
"What demonetisation did to the digital payment industry like how Paytm acquired customers, similarly this lockdown has been a big positive for the B2C segment business for fuel delivery. Word of mouth and Whatsapp presence has actually helped us market our service. Despite the market for home delivery of fuel is at a very small scale right now, India will see 30 percent growth from delivery business from 10,000 crore litres diesel market" said Adnan Kidwai, Co-Founder, FuelBuddy.
It delivers diesel to companies like Wipro, Infosys and plans to give special discounts to people working in the essential service sector like medical, health, sanitation police, and media.
PEPFUELS another fuel delivery company based in Delhi has started delivering diesel to hospitals and pharmaceutical companies during the lockdown as many outlets are closed. The company is actively targeting the operational sectors during the lockdown and is trying to acquire an e-commerce delivery company. As of now, the company has been servicing hotels, warehouses, telecom towers, industrial areas, and shopping malls. It believes the COVID-19 led lockdown will allow them to acquire new customers and demand for delivery of fuel will only go up from hereon.
"Capacity utilisation is at 20-25 percent, we expect it to increase it to 40-45 percent as and when there is an ease in the lockdown. We are reached out to companies phase-wise as and when the government allows the opening of industries. We are looking to seal a deal with an e-commerce delivery company for diesel doorstep supply" said Sandeep Thakur, Co-founder, PEPFUELS.
The company was looking to expand its business towards the agricultural and mining belt as it consumption is high in those areas, the future for this expansion may look bleak amidst COVID-19 uncertainties, the company is hopeful the fuel delivery market growth will be higher post the pandemic.
Another app-based company in Pune, Repos which caters to companies like Tata, Reliance, Kirloskar, JW Marriot, Radisson amongst others, has suddenly started receiving orders from housing societies and small scale industries. The company has lowered its minimum order quantity cap of 200 litres, to meet the demand but does not plan to enter the B2C segment as yet. The company delivers diesel at the doorstep in 10 cities across India and plans to scale up operations to 100 cities by the next year.
To deliver fuel, one must have approvals from Oil Marketing Companies like IOCL, BPCL & HPCL along with Petroleum and Explosives Safety Organisation (PESO) approval for delivery vehicles. As of now, only diesel as fuel is allowed for doorstep delivery.
