Cen­tre ready to re­view rules to open up fuel re­tail­ing: Prad­han

CON­SUMERS MUST GET THE BEST RATES FOR WHAT THEY BUY, SAYS OIL MIN­IS­TER

Resource Digest - - CONTENTS -

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 bet­ter price.

“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 Rs. 2,000 crore in ei­ther hy­dro­car­bon ex­plo­ration and pro­duc­tion, re­fin­ing, pipe­lines or liq­ue­fied nat­u­ral gas (LNG) ter­mi­nals.

“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 said.

GLOBAL IN­TER­EST

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 data.

Shell also op­er­ates a 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.

PRAD­HAN URGES CMS TO ALLOT LAND FOR OIL DEAL­ER­SHIP TO SC/STS

Var­i­ous petro-prod­ucts, namely petrol and diesel, are dis­trib­uted through deal­er­ships al­lot­ted mostly to in­di­vid­u­als by the Oil Mar­ket­ing Com­pa­nies (OMCS).

The com­pa­nies have a laid down pro­ce­dure for se­lect­ing deal­ers. Pro­vi­sion for pro­por­tion­ate rep­re­sen­ta­tion to can­di­dates be­long­ing to Sched­uled Caste/sched­uled Tribe is also pro­vided for. This is part of the af­fir­ma­tive ac­tion en­vis­aged by the com­pa­nies for the ben­e­fit of can­di­dates be­long­ing to SC/ST com­mu­ni­ties.

A re­view of the per­for­mance of the Oil Mar­ket­ing Com­pa­nies on this ac­count was un­der­taken by Min­is­ter of State (I/C) for Petroleum & Nat­u­ral Gas Dhar­men­dra Prad­han. It was no­ticed that for lo­ca­tions ear­marked for SC/ST can­di­dates, the re­sponse was not sat­is­fac­tory, es­sen­tially on ac­count of non-avail­abil­ity of land.

This was at­trib­ut­able to the tra­di­tional ex­clu­sion of such com­mu­ni­ties from land own­er­ship. It was ob­served that dur­ing fi­nan­cia year 2014-15, as many as 5,994 lo­ca­tions were ad­ver­tised specif­i­cally for the ben­e­fit of such can­di­dates.

DHAR­MEN­DRA PRAD­HAN, MIN­IS­TER OF STATE (I/C) PETROLEUM & NAT­U­RAL GAS

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