Oil Ministry issues relaxed guidelines for bulk petrol and diesel sale

The Ministry of Petroleum and Natural Gas had simplified the guidelines for grant of authorisation for bulk and retail marketing of Motor Spirit (Petrol) and High-Speed Diesel (Diesel).

“The simplified guidelines aim at increasing private sector participation in the marketing of Petrol and Diesel. An entity seeking authorisation for either retail or bulk must have a minimum net worth of ₹250 crore at the time of making the application. The minimum net worth should be ₹ 500 crore in case of authorisation for both retail and bulk,” an official statement said.

This simplification was initiated through a resolution on November 8, 2019.

“For retail authorisation, 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 statement said.

“This move 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 the retail network in remote areas and ensure higher levels of customer service,” the statement added.

The relaxed policy is being viewed as an attempt to attract more private players in the fuel retailing business. Before this development, a company had to invest at least ₹ 2,000 crore in either hydrocarbon exploration and production, refining, pipelines or liquefied natural gas (LNG) terminals to obtain a auto fuel retailing licence in India.

The Petroleum Ministry is now seeking applications from parties who want to set up these bulk or retail auto fuel marketing outlets under relaxed terms.

Presently, Public Sector Undertaking, Oil Marketing Companies dominate the auto fuel retailing business in the country. Indian Oil Corporation Limited leads the pack with some 29,000 outlets, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited come to a second and third with around 16,000 outlets each.

In the private sector, Nayara Energy has around 5,700 outlets, Reliance Industries has 1,400, and Shell India has about 190 outlets.