(FE)
Consumers in India may soon be able to buy petrol and diesel from, say, an Ikea outlet, an H&M store or other general retail outlets. The ministry of petroleum and natural gas on Tuesday invited public comments on a proposal to allow firms other than oil companies to retail fuels subject to a minimum net worth criterion. Earlier, a report submitted by an expert committee had suggested doing away with the conditions that require a company own and operate refineries with an investment of at least Rs 2,000 crore, or an exploration and production company to have at least three million tonne of crude oil production annually to be authorised to operate retail fuel outlets or sell aviation turbine fuel.
The move to allow firms other than oil companies to operate fuel retail outlets is in the wake of the lower-than-expected interest shown by Indian and foreign private oil companies to invest in the segment even after the de-regulation of auto fuel prices. Also, there is little evidence of real competition among the PSU retailers when it comes to pricing of petroleum products although all of them now sell branded fuels also.
“For the companies operating in the oil and gas sector who have made or propose to make large investments in this sector, marketing right for transportation fuels does not appear to be an incentive. Hence the continuation of extant investment criterion for marketing authorisation to only the oil and gas companies is likely to deprive the market of participation from companies which may not be making huge investments in oil and gas sectors but may have varied offerings to make the market more customer-oriented,” the committee said in the report.
