After years of global success, Mukesh Ambani's RIL faces oil shock at home

Business Standard: Reliance Industries, currently India's second most valuable listed company, got rich by trading fuel across Asia, Africa and Europe while effectively ignoring its home market.

Reliance's refineries processed crude from the nearby Middle East and sold fuel to fast-growing markets in North Asia including China, Japan, South Korea and Taiwan.

That began to change when India's oil demand surged, overtaking Japan as the world's third-biggest consumer. Reliance took more interest in the country's retail fuel sector and has opened more than 1,300 service stations.

This push into the domestic fuel market may stumble after India's government imposed cost controls on October 4 on gasoline and diesel prices to rein in recent record highs.

Reliance's shares plunged 6.9 per cent on the day of the announcement and are down about 20 per cent since their record close on August 28. Mukesh Ambani

The decline has pushed Reliance's market capitalisation down to Rs 6.64 trillion ($90.47 billion) and it is no longer India's most valuable company, sitting behind Tata Consultancy Services Ltd at Rs 6.77 trillion.

The price shock, driven by soaring crude import costs, angered consumers and triggered riots by farmers, forcing the government to react at the cost of its refiners' health.

For now, Reliance is staying with its retail plans despite the recent trouble. BS