EXPENDITURE STRATEGY - RELIANCE INDUSTRIES

1. Reliance Industries Ltd., owner of the world's third-biggest oil refinery, cut domestic sales of gasoline and diesel last year because it couldn't compete with Indian Oil Corp., the nation's biggest refiner because state-run rivals sell fuel below cost under government orders. Losses on retailing oil products prompted Reliance to stop sales at some stations, cutting its market share to 2 percent in September from 13 percent in April 2006
2. It has slowed down the pace of retail network expansion as compared to the previous years to cut losses from selling fuels.
3. It may buy lower-grade supplies for domestic retail outlets from domestic producers including Mangalore Refinery & Petrochemicals Ltd.
4. It won government permission this year to exempt its crude oil imports from taxes in return for exporting at least 75 percent of its products.

[Indian Oil, the nation's biggest refiner, is losing 6.10 rupees (15 cents) for every liter of gasoline it sells and 3.75 rupees on a liter of diesel. Of the total losses, a third is reimbursed by the government as bonds, an equal amount is paid by companies including Oil & Natural Gas, and the refiners bear the remainder.]

In a lose-lose market you always have to find ways to lose your losses.

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