Centre ready to review rules to open up fuel retailing: Pradhan
CONSUMERS MUST GET THE BEST RATES FOR WHAT THEY BUY, SAYS OIL MINISTER
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.
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