The Oil and Natural Gas Corporation Ltd will start setting up retail outlets for petroleum products in the first half of the next fiscal.

The integrated oil company, which is open to the idea of a joint venture on this score, may also float a separate company to handle its retail network. The decision on this is expected to be taken during the first quarter of 2004-05.

The chairman and managing director of ONGC, Subir Raha, said, "We are hopeful of setting up the first lot of petroleum retailing outlets in the second quarter of the next fiscal year. Slowly we want to expand across the country. We are now working on finalising the sites for opening the retail outlets and building a new brand. This should be done by the end of the current fiscal year."

ONGC, which was earlier allowed to set up 600 retail outlets across the country, got authorisation for additional outlets in May last year.

MRPL will help ONGC get a steady supply of petroleum products for selling through its retail outlets, while the oil and gas major will try to use the advantage of the Mangalore-Hassan-Bangalore product pipeline in which MRPL is a partner.

The pipeline will help ONGC move products to its retail chain in the southern part of the country.

ONGC is planning to start setting up its retail outlets first in Kerala, Karnataka, Pondicherry and then it will move to Goa, Maharashtra and Gujarat.

"We are planning to set up 100 retail outlets in Andhra Pradesh and 500 will be opened in Gujarat, while the rest 500 will be divided in the other states," said a source.

ONGC is required to abide by the norm which says a 11 per cent of a marketer's retail outlets have to be developed in remote and low-service areas.

"We are planning to build a separate entity for the petroleum retail business which may be formed during the first quarter of the next fiscal year. We are also open to joint venture kind of arrangement, which, however, depends on what sort of offer we get from a possible partnering company. As we are not in the retail trade, we will require expertise from companies in this field, and if we do not get any such proposal, we will move alone with a new entity," said Raha.

ONGC had last year appointed a consultant for designing its retail outlets and it has been learnt that ONGC is yet to finalise the designs of its retail outlets.