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Old 17th October 2018, 11:06   #1
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Govt plans to allow private players in the fuel retailing sector

The Government of India has set up a committee to review the guidelines for the fuel retailing sector, which could ease the entry of more private multinational companies.

Govt plans to allow private players in the fuel retailing sector-total.jpg

According to a media report, the committee will be reviewing the existing framework of private sector participation in retail marketing and identifying the hurdles that might prevent private entities from expanding their business. Companies are required to have a basic infrastructure investment of about Rs. 20 billion or have to provide bank guarantees of an equivalent amount to enter the retail business.

Existing norms could be eased to facilitate the entry of companies like Total SA of France. Currently, out of the 56,999 fuel outlets in India, 6,276 are privately owned. The major private players are Nayara Energy (4,756 outlets), Reliance Industries and Shell.

The government may also consider marketing models like selling petrol and diesel at supermarkets, similar to what is popular in the UK and France.

Reports suggest that the committee will be discussing the matter with various stakeholders and is likely to submit its report within 2 months.

Source: Business Standard

Link to Team-BHP News
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Old 17th October 2018, 11:17   #2
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re: Govt plans to allow private players in the fuel retailing sector

Let us accept the 'sarkari' sector is just that. Remember at one time we had fuel retailing by Esso, Caltex and Shell. They went on to become BP, HP and IOC. Those were the days of the PSUs holding the towering heights of the economy. So I will not mind reverting a bit. So far the experience has been very good. Telecom sector would not have happened if we were stuck with the BSNL/MTNL duo poly. The latest offering of BSNL is Net Telephony! Also, see HAL made the MiG21 as widow maker (poor thermal processing of the engine, leaving Ferrous content), and production rate for the Sukhoi's abysmally low.

Remember in the days of the public sector occupying the 'commanding heights' profit was considered a crime. Now see the amount of hullabaloo on the French taking Rafale out of HAL purview. Also, HAL never bothered with innovation and reverse engineering. I was amused by claims that we made Gnats. Yes, but technology has moved on, a bit.

Last edited by Akshay1234 : 18th October 2018 at 10:44. Reason: mad = made
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Old 17th October 2018, 11:57   #3
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re: Govt plans to allow private players in the fuel retailing sector

Instead, get MNCs to invest in piped natural gas infrastructure for all homes across India. So that we no longer have these bombs in our kitchen:

Govt plans to allow private players in the fuel retailing sector-gascylinder.jpg

Very profitable business too - if we look at the financials of Indraprastha Gas (for New Delhi) and Mahanagar Gas (for Mumbai)

Last edited by SmartCat : 17th October 2018 at 12:01.
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Old 17th October 2018, 13:00   #4
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re: Govt plans to allow private players in the fuel retailing sector

Quote:
Originally Posted by smartcat View Post
Instead, get MNCs to invest in piped natural gas infrastructure for all homes across India. So that we no longer have these bombs in our kitchen:

Attachment 1808808

Very profitable business too - if we look at the financials of Indraprastha Gas (for New Delhi) and Mahanagar Gas (for Mumbai)
No one stops them from doing so.
There are regular bidding rounds by PNGRB for Citygas distribution. You can check who has won which cities.

However, everything is not as hunky-dory as it seems, in fact you will find that most private party don't want to get into the business of distributing gas, and most bidders/winners are PSU or consortium of various PSUs

Check the PNGRB site.
Example: http://www.pngrb.gov.in/cgd-network-bid-2018.html
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Old 17th October 2018, 19:23   #5
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re: Govt plans to allow private players in the fuel retailing sector

I believe there is very less potential, considering the "hot" properties are already leased to PSUs for fuel retail. (Oil Marketing Companies lease a land for around 25-35 years).

Since, location and service are primary factors to bring in volumes, adding more retail outlets wont give the "pie" from the existing cake.

The rural areas are well penetrated by all PSUs and Private players.
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Old 18th October 2018, 09:49   #6
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re: Govt plans to allow private players in the fuel retailing sector

^ No doubt, Sudeep. The availability of real estate will be the biggest hurdle. That said, the environment could never have been better. Deregulation of fuel prices, growing demand & a Top 4 car market in the world = that's India.

Just wondering though what the long-term business projections would be, with all the talk of electric vehicles. A game-changer would be setting up a supercharger network in India (like Tesla has done in the USA).
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Old 18th October 2018, 10:13   #7
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Re: Govt plans to allow private players in the fuel retailing sector

Why not have private player? It seems to me it cannot be any worse. It can only get better. Bring them on, I say!



Quote:
Originally Posted by sgiitk View Post
Now see the amount of hullabaloo on the French taking Rafale out of HAL purview.

OT, but you seem have completely missed the point. The hullabaloo is not due to the French taking Rafale out of HAL purview. The hullabaloo is mainly because the Indian government allegedly imposed Reliance as offset partner on the the French. The union documents have made that allegation somewhat credible. At least HAL made Gnats. What is the track record of Reliance?
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Old 18th October 2018, 11:01   #8
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Re: Govt plans to allow private players in the fuel retailing sector

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Originally Posted by ashlil View Post
At least HAL made Gnats. What is the track record of Reliance?
What do you expect from a '12 day' old company? F-18s
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Old 23rd October 2018, 18:55   #9
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Re: Govt plans to allow private players in the fuel retailing sector

Quote:
Originally Posted by GTO View Post
Just wondering though what the long-term business projections would be, with all the talk of electric vehicles. A game-changer would be setting up a supercharger network in India (like Tesla has done in the USA).
I did ask some budding officers in OMC PSUs. They believe the demand will keep increasing for another 25-30 years unless something really groundbreaking happens.

The EV scene does give me some worry for the future of Petroleum. I personally feel the EVs will start hitting the petroleum growth in another 7-8 years.

On a brighter side, it might keep the crude prices in check.

P.s- I am a dealer for Hindustan Petroleum and Reliance.
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Old 23rd October 2018, 19:02   #10
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Re: Govt plans to allow private players in the fuel retailing sector

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Originally Posted by sudeep.pandya View Post
P.s- I am a dealer for Hindustan Petroleum and Reliance.
Sudeep, can you share what it takes to run a HP/Reliance dealership? In a separate thread perhaps?
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Old 29th June 2020, 16:37   #11
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Re: Govt plans to allow private players in the fuel retailing sector

Do we have a thread on Nayara Energy? They seem to have opened a few outlets here in Bangalore. Would love to get the feedback of fellow teambhpians.
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