Govt taking relook at licensing rules for petrol pumps

New Delhi, Aug 10 The Ministry of Petroleum and Natural Gas has formed an expert committee to review the 2019 norms for issuing licenses for petrol pumps, keeping in mind market efficiency and India’s push for alternative fuels, decarbonisation, and e-mobility.

The expert committee will "assess the effectiveness of the framework envisaged in Resolution dated November 8, 2019, in ensuring energy security and market efficiency; align the policy framework with national commitment towards decarbonisation, electrical mobility and promotion of alternative fuel; and address issues in implementation of existing guidelines", the order states.

The government is taking a relook at the norms to see whether they need to be further liberalised

The committee is headed by Bharat Petroleum Corporation Ltd's (BPCL) former Director, Marketing, Sukhmal Jain. Other members of the four-member committee are Petroleum Planning and Analysis Cell (PPAC) Director General P. Manoj Kumar, FIPI member P.S. Ravi and the Petroleum and Natural Gas Ministry's Director, Marketing, Arun Kumar.

The government had liberalised the norms in 2019 to allow more companies to set up retail fuel outlets. Firms with a net worth of Rs 250 crore could sell petrol and diesel, provided they agreed to set up infrastructure for at least one alternative fuel such as CNG, LNG, biofuels, or EV charging within three years. For companies serving both retail and bulk fuel customers, the net worth requirement was set at Rs 500 crore.

The ministry has also invited public and stakeholder feedback on the proposed changes within 14 days from August 6.

Before 2019, companies needed to invest or commit Rs 2,000 crore in oil exploration, refining, pipelines, or LNG terminals to qualify for a fuel retailing licence. The 2019 reforms reduced the threshold significantly and mandated setting up at least 100 retail outlets, with 5 per cent in rural areas within five years.

Global energy majors like Total, BP, and Saudi Aramco have evinced an interest in investing in India’s fuel retail sector. Currently, public sector giants Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corp Ltd (BPCL), and Hindustan Petroleum Corp Ltd, together, own and operate most of the country’s 97,804 petrol pumps.

The IOC is the market leader with 40,666 petrol pumps in the country, followed by the BPCL and the HPCL with around 24,000 each.

Reliance Industries, Nayara Energy (formerly Essar Oil), and Royal Dutch Shell are the private players in the market, but account for a small presence.

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