NEW DELHI: The Centre on Wednesday threw open the Indian fuel retailing sector to non-oil sector companies in one of the biggest reforms in the oil and gas sector over the past two decades.
The day saw the Cabinet Committee on Economic Affairs (CCEA) approving a new set of guidelines for authorising companies to market transportation fuels, including drastically reducing the earlier investment threshold for firms to be eligible for permit.
According to the earlier policy implemented in 2002, only companies which had invested more than Rs 2,000 crore in upstream segments like hydrocarbon exploration and production, refining, pipelines or liquefied natural gas (LNG) terminals would be eligible for a retail fuel marketing license. This requirement has been done away with now.
“There will be a much lower entry barrier for private players. Entities seeking authorisation would need to have a minimum net worth of Rs 250 crore. Non-oil companies can also invest in the retail sector,” the CCEA said in an official statement.
“The new policy will bring in more investment and give a fillip to ‘Ease of Doing Business’. It will boost direct and indirect employment in the sector. Setting up of more retail outlets will result in better competition and better services for the consumer,” added Union Minister Prakash Javadekar.
India’s fuel marketing sector is largely dominated by three state-run oil marketing firms: IndianOil, Bharat Petroleum and Hindustan Petroleum. Of the 65,554 petrol pumps in India currently, private players like Reliance (1,400 outlets), Nayara Energy (5,344) and Shell (160) have a very small presence.
However, these companies will be required to meet new conditions in order to keep their licenses. they are required to install facilities for marketing at least one new generation alternate fuel, like CNG, LNG, biofuels, electric charging, etc. at their proposed retail outlets within three years of operationalisation.
In addition to conventional fuels, the companies are required to install facilities for marketing at least one new generation alternate fuel, like biofuels, CNG, LNG and electric charging at their proposed retail outlets within three years of operationalisation.