Essar Group has agreed to buy SGN Retail, which owns 118 forecourts, in a deal that allows the Indian conglomerate to double the size of its petrol station network. The purchase comes as Essar pushes to expand its network to 800 forecourts by 2031. The sites would be supplied by its own refinery at Stanlow, the UK's second largest by output, which Essar believes will allow it to offer more competitive prices at the pump.

SGN Retail is one of the highest-quality forecourt networks in the UK, with sites averaging the size of three tennis courts. Essar declined to comment on the valuation of SGN, but recent deals have valued forecourts at about £3.5mn per site, suggesting a valuation in the region of £400mn. Globally, oil companies such as BP and Shell have been retreating from petrol stations, under pressure from investors who argue that it makes more sense for them to be operated by retail specialists.

Despite the rise of electric vehicles, Essar said that it saw a strong rationale for expanding into petrol stations because of a combination of population growth, the rise of multi-car households and the declining number of forecourts in the UK overall. There are about 8,300 forecourts in the UK, with the Esso brand having the largest presence. The largest independent petrol station operator is Motor Fuel Group with more than 1,200 forecourts.

Essar said its plan to reach 800 petrol stations by 2031 would give it about 9 per cent of the UK market. The group, which was founded by the Indian billionaire brothers Shashi and Ravi Ruia in 1969, bought the Stanlow refinery from Shell in 2011. Stanlow produces about 270,000 barrels per day.

Essar has said it plans to invest $2.4bn in Stanlow to make it into a low-carbon energy hub including carbon capture, hydrogen and sustainable aviation fuel production.