There's more good news for your car -- it will soon get more and better branded fuel.

Encouraged by the success of branded fuel launched last year, public sector oil majors are lining up higher variants of their existing branded fuels or more expensive but better quality fuel for launch this year.

The new brands may be an extension of the existing brands or virgin brands requiring the companies to spend more on advertising and promotions.

The new products, which will contain better varieties of additives, will deliver higher fuel efficiency. They will also be priced a notch, maybe a rupee per litre, higher than the existing branded fuels.

Both brands will co-exist, according to key officials of the four oil companies -- Bharat Petroleum Corporation Ltd, Indian Oil Corporation, IBP Company Ltd and Hindustan Petroleum Corporation Ltd.

The branded fuels available currently are Speed (BPCL), Premium (IOC), Power (HPCL) and Josh (IBP). They co-exist with the normal variety of petrol or diesel, but are priced a rupee higher.

According to an executive of BPCL, the share of branded petrol in its total petrol sales is as high as 20 per cent across the country, and the demand is increasing. "We are still studying whether the entry of a second branded fuel will have any impact on the existing brand.

"Nonetheless, our experience with Speed suggests that people are willing to buy the more expensive branded fuel primarily because it delivers more fuel efficiency and takes care of your vehicle's engine," he said.

An IOC executive said the oil companies were also being egged on by car manufacturers to produce and deliver better quality fuel to improve the efficiency of their vehicles.

"Also, inter-city and long-distance travel by cars have increased with better roads and related infrastructure. People who use cars to make frequent long-distance travels will prefer to use branded fuel," he added.

But even within the cities, the demand for branded fuel has been growing. In March, 19 per cent of BPCL's petrol sales came from Speed. IOC's Premium, HPCL's Power and IBP's Josh contributed 15 per cent, 13 per cent and 8 per cent, respectively, of their overall petrol sales.

Contributions of branded diesel--IOC's Super, HPCL's Turbo and IBP's Shakti--to total diesel sales were equally high.

Not only this, demand for branded petrol has already started coming in from smaller cities and towns, where these fuels have not been launched as yet. "We have to tap this latent demand sooner or later," says an HPCL executive.

BPCL executives said they were setting up as many as 750 petrol stations this year with a plan outlay of Rs 800 crore (Rs 8 billion). IOC said it would invest Rs 1,500 crore (Rs 15 billion) in setting up 1,000 petrol stations and improving the existing infrastructure.

Watch out for more activity on the oil retailing front before a Reliance or a Shell hits the road!