Want to set up petrol pump? Time to tell govt what you really want in place

An expert committee set up to recommend relaxing norms for setting up petrol pumps and retailing ATF in India has sought public comments on the issue before finalising its views. The Oil Ministry had last month set up a five-member expert committee to recommend easing of fuel retailing licensing rules. "The first meeting of the committee was held on November 2, and the Committee desired to have the views/suggestions of all the stakeholders/ general public," a notice issued by the ministry said.

It asked for comments on the subject within two weeks.

At present, to obtain a fuel retailing license in India, a company needs to invest Rs 2,000 crore in either hydrocarbon exploration and production, refining, pipelines or liquefied natural gas (LNG) terminals.

The expert committee has been asked to "look at various issues related to the implementation of existing guidelines for grant of marketing authorisation of market fuels - petrol, diesel, and aviation turbine fuel (ATF)," the separate ministry order constituting the panel said.

The panel includes renowned economist Kirit Parikh, former oil secretary G C Chaturvedi, former Indian Oil Corp (IOC) chairman M A Pathan, IIM Ahmedabad Director Errot D'souza and Ashutosh Jindal, joint secretary in the ministry of petroleum and natural gas.

The panel has to furnish its report within 60 days after due consultations with stakeholders.

The panel will "review the existing architecture and extent of private sector participation in retail marketing of major transportation fuels in the country," the order said.

It will "identify entry barriers, if any, for expansion of retail outlets for private marketing companies."

State-owned oil marketing companies - Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), currently own most of 63,498 petrol pumps in the country.

Reliance Industries, Nayara Energy - formerly Essar Oil and Royal Dutch Shell are the private players in the market but with limited presence. Reliance, which operates the world's largest oil refining complex, has less than 1,400 outlets.

Nayara has 4,833 while Shell has just 114 pumps.

BP plc of UK had a couple of years back secured a license to set up 3,500 pumps but hasn't yet started doing so. Last week, French energy giant Total in a joint venture with Adani Group announced plans to set up 1,500 petrol pumps in the next 10 years.

IOC is the market leader with 27,325 petrol pumps in the country, followed by HPCL with 15,255 outlets and BPCL at 14,565 fuel stations.

The expert committee will "assess the need, if any, to further liberalise the existing guidelines for authorisation of private sector marketing companies," the order said.

A senior oil ministry official said the government is keen on getting more private players in the arena and is willing to relax investment norms as well as the number of permissions needed for setting up a petrol pump.

The expert group would make specific recommendations on the nature of amendments required to the existing guidelines for grant of a license to private retailers.

The official said more competition would improve services as well as give customer choice. It may also lead to retailers vying with each other to offer the best price.

Currently, the three oil marketing companies are following the same methodology for fixing retail prices, which on almost all occasions are in sync with one another and prices vary by just a few paise.