Senior government officials told The Financial Express that EOL has informed the petroleum ministry that it has identified 1,700 locations all over the country for setting up retail outlets. EOL wants the government to allow setting up of these outlets immediately for marketing products soon after the commissioning of its refinery.

In its plans to the nodal ministry, MRPL has disclosed that it has identified as many as 1,800 locations for setting up its retail outlets.

"They have asked for marketing rights straight away as they have been incurring losses since the start of deregulation and they need to establish market presence before complete deregulation," officials said.

Both RPL and EOL have demanded access to the distribution infrastructure of PSUs on a commercial basis.

As per official sources, RPL has asked for a common carrier principle for the use of pipelines, jetties, hydrants, etc, besides freedom for selecting the best distribution channels/locations.

During the interim period (till complete deregulation sets in), MRPL has also sought access to supply at all PSU locations at "fair" prices all-India tariff adjusted import parity price plus notional rail freight plus pool surcharge.

While demanding marketing rights, EOL has conveyed that it was also prepared to set up these outlets in economically-backward areas.

"EOL has informed us that they would be setting up the retail outlets with their own funds and therefore proposed to be treated at par with similar dealers commission and retail pump outlet (RPO) charges," officials said.

While demanding marketing rights for the controlled petroleum products during the interim period, RPL has emphasized that refinery was the only means to achieve the end goal (ie, marketing) and that refinery margins were generally only one-eighth of those of marketing margins.

RPL has stated that if they did not get marketing rights they would not be on equal footing with others for negotiating the marketing of their products.

It may be recalled that in the past when the Assam Oil Division (AOD) started marketing, the share of existing players was reduced and AOD share was introduced. RPL's position is that not only the growth but also the existing volumes have to be allocated to RPL because of the refinery capacity share.

"RPL's market share could be based on its refining capacity, which was about 24 per cent. RPL wanted marketing rights immediately so that when transition period is over and full deregulation sets in, it would be well-prepared, as the development of required infrastructure would take time," officials said.

It may be noted here that as per the government's current policy, the refineries in the private/joint sector are not permitted to undertake marketing of controlled products.

Panel report soon
The petroleum ministry committee is giving final touches to a report on the impact of the deregulation of marketing of controlled petroleum products, especially the opening of marketing to the private parties before complete deregulation.

"The report of the committee headed by additional secretary (petroleum) Naresh Narad is under finalisation and will be submitted soon," a senior petroleum ministry official said.