FuelBuddy, a startup specialising in doorstep fuel delivery, has introduced a buy now pay later (BNPL) service that allows customers to buy diesel on credit with zero interest and a 22-day repayment in collaboration with a bank. The new offering is aimed at boosting sales and expanding its market presence, which currently caters to both the domestic and international markets, according to a top executive of the company.
Access to credit facilities plays a crucial role in the growth of any industry. “Historically, the domestic oil industry has relied on petrol pumps to act as both financiers and money lenders. However, we are proud to be the pioneers in introducing a smart customer solution in collaboration with a bank, revolutionising the way credit is made available in this sector,” said Neeraj Gupta, CEO.
FuelBuddy begin operations in March 2018 and today serves 180 cities across the country, along with two overseas markets.
Currently achieving a monthly delivery volume of 70 to 75 lakh across all the cities where it operates, the startup expanded its operations to two international markets—the UAE and Mozambique—in April this year, primarily to sustain growth and generate higher profits.
Speaking to businessline, Gupta said that although there is substantial market potential for diesel delivery within India, the domestic market offers regulated pricing of the product, which results in minimal profit margins.
“In fact, at times, the operational costs are equivalent to the margins earned. Consequently, in order to ensure profitability, we recognised the need to venture beyond the domestic market and focus on attaining higher volumes and better margins abroad,” he explained.
Going forward, while it continues to focus on geographic expansion and aims to be in 300 cities by the end of this financial year, FuelBuddy will also enter the lubricant space soon. “By the next quarter, we will be completely ready with our technology stack to offer customers lubricant solutions.”
The startup made an annual turnover of ₹610 crore in FY23 and expects to be profitable by this year. Elaborating on its revenue model, the CEO said that they charge a convenience fee from a customer to offer delivery at the doorstep.
FuelBuddy has formed strategic partnerships with leading state-run oil corporations, including Indian Oil Corp. (IOCL), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL). Furthermore, in its pursuit to enter the lubricant market, it has also announced tie-ups with IOCL and HPCL to strengthen its presence in this segment.
The startup claims to address problems of safety, adulteration, and pilferage in fuel handling. It operates a fleet of specialised refuellers, and makes deliveries as low as 20 litres directly to everyone, from schools, hospitals, apartments, and commercial setups running Diesel generators to fleets and cars .