Modi govt eases rules for private firms to sell petrol, diesel; check eligibility, net worth required, etc

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August 4, 2020 5:12 PM

For retail authorisation of petrol and diesel, an entity should set up at least 100 retail outlets and must have a minimum net worth of Rs 250 crore at the time of making application.

petrol, diesel, fuel price, oil marketing companies, OMCsThe government said that the policy has opened up the marketing sector of petroleum products by removing the strict conditions applicable earlier.

In an effort to increase private sector participation in the marketing of petrol and diesel, the Narendra Modi-led government has simplified the guidelines for grant of authorisation for bulk and retail marketing of fuel. For retail authorisation of petrol and diesel, an entity should set up at least 100 retail outlets and must have a minimum net worth of Rs 250 crore at the time of making the application, according to the Ministry of Petroleum & Natural Gas. The government said that the policy has opened up the marketing sector of petroleum products by removing the strict conditions applicable earlier, and has the potential to revolutionise marketing of transport fuels in the country. 

According to the new guidelines, the applications can be submitted directly to the ministry. Along with the private sector, foreign players can too avail the authorisation for bulk and retail marketing of petrol and diesel. The government’s effort is aimed at encouraging dispensing of alternate fuels and augmentation of retail networks in remote areas and ensuring high levels of customer service.

Also Read: Taxes triple petrol, diesel prices in India; gap widening between retail fuel prices and crude oil prices

So far, the retail marketing of petroleum products in India is done by the PSU oil marketing companies (OMCs), which are Indian Oil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), Numaligarh Refinery Ltd (NRL), Mangalore Refinery & Petrochemicals Ltd (MRPL), Bharat Oman Refineries Ltd (BORL) and a few private companies like Reliance, Essar, and Shell. As on 1 May 2019, there are 313 terminal including private companies, 192 LPG bottling plants, 64,703 retail outlets including private companies, 23,757 LPG distributorships, and 6,528 Light Diesel Oil (LDO) and Superior Kerosene Oil (SKO) dealers in the country, according to the petroleum ministry. 

Meanwhile, Finance Minister Nirmala Sitharaman had recently opened all the sectors for private companies under PM Modi’s Atma Nirbhar Bharat Abhiyaan. She had also said that the government will announce the strategic sectors where there will be limited participation of the government-owned companies.  

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