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New Delhi: The Ministry of Petroleum and Natural Gas has simplified the guidelines for grant of authorization for bulk and retail marketing of Motor Spirit (Petrol) and High-Speed Diesel (Diesel). The ministry clarified the resolution dated November 8, 2019. The simplified guidelines are aimed at increasing private sector participation in the marketing of petrol and diesel to the retail and bulk user. Any entity desirous of seeking authorization for either retail or bulk must have a minimum net worth of Rs 250 crore at the time of making an application (Rs 500 crore in case of authorization for both retail and bulk). Applications may be submitted in prescribed Application Form directly to the Ministry. For retail authorization, the entity is required to set up at least 100 retail outlets. "The policy has opened up the marketing sector of Petroleum products by removing the strict conditions applicable earlier. The policy has the potential to revolutionise marketing of Transport fuels in the country" a press release issued by the Ministry noted.
Last year, the government had relaxed norms for retailing of auto fuels, allowing non-oil companies to venture into the business — a move that could help private and foreign firms to enter the world's fastest-growing market. Prior to that, a company had to invest Rs 2,000 crore in either hydrocarbon exploration and production, refining, pipelines or liquefied natural gas (LNG) terminals to obtain a fuel retailing licence in India.
In the statement, the ministry further said "The issue of Resolution for grant of authorization for bulk and retail marketing of petrol and diesel will liberalise the guidelines to increase private sector participation, including foreign players in the marketing of petrol and diesel. It will also encourage dispensing of alternate fuels and augmentation of retail network in remote areas and ensure higher levels of customer service".
The government had last set fuel marketing conditions in 2002 and the November 2019 change was based on the recommendation of a high-level expert committee. Experts say that the move will facilitate entry of global giants such as Total SA of France, Saudi Arabia's Aramco, BP Plc of the UK, and Trafigura's downstream arm Puma Energy.
Total SA in partnership with Adani Group had in November 2018 applied for a licence to retail petrol and diesel through 1,500 outlets. BP too has formed a partnership with Reliance Industries to set up petrol pumps. Currently, the state-owned oil marketing company Indian Oil Corp (IOC) is the market leader with 29,368 petrol pumps in the country, followed by HPCL with 16,707 outlets, and BPCL with 16,492 fuel stations.
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