Centre ready to review rules to open up fuel retailing: Pradhan
India could relax regulations governing the entry of foreign firms in the country’s oil retailing
business. This, it believes, will create more competition and, in turn, provide consumers fuel at a
“Right now, the conditions mandate investment by the company before starting fuel retailing
operations. But to bring in more competition, we have to revisit and re-examine those conditions,”
Dharmendra Pradhan, Minister of State (Independent Charge), for Petroleum & Natural Gas, said.
At present, to obtain a fuel retailing licence in India, a company needs to invest ₹2,000 crore in
either hydrocarbon exploration and production, refining, pipelines or liquefied natural gas (LNG)
“We are in a consumer-centric market. There was a time when we needed to ensure that the
consumer is not exploited. Now, we want the consumers to get the best rates for whatever they
buy. To do that, competition is required and the conditions for investment before starting fuel
retailing need to be re-examined,” he told BusinessLine.
Pradhan’s comment could be interpreted as a ‘positive signal’ by some global majors, such as Saudi
Aramco, who have been evincing interest in doing business here.
The Minister is taking his cue from the recently announced Civil Aviation Policy. “The relaxation of
5/20 norms under the aviation policy has given us a good model,” he said.
In the last five-six years, the country’s petroleum retailing business has seen a change with the
government deregulating auto fuel prices in phases.
Though dominated by public sector retailers, there were domestic private players — Reliance
Industries and Essar Oil — as well as global majors such as Shell in the business here.
Prior to deregulation, the going was tough for private and global players as they were compelled to
sell fuel at par with the subsidised rates at which public sector entities sold. “But, now, international
players are also keen to enter the retail business,” he said.
There are 56,190 fuel retailing outlets in the country (as on April 1). Of these, 93 per cent belong to
public sector oil marketing companies Indian Oil Corporation, Bharat Petroleum Corporation and
Hindustan Petroleum Corporation. A few belong to Mangalore Refinery & Petrochemicals Ltd. Indian
Oil Corporation alone has almost 45 per cent of the outlets.
In the private sector, Essar Oil has the largest number at 2,100. Reliance Industries comes in second
with 1,400 outlets and Royal Dutch Shell has 82, according to Petroleum Planning and Analysis Cell
Shell also operates an LNG terminal in Hazira, Gujarat that allows it to have fuel retailing operations
in India. BP Plc got approval to sell aviation turbine fuel in the country in January, after a long wait.