Team-BHP - Govt of India makes it easier to open a petrol pump

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, today approved the 'Review of Guidelines for Granting Authorisation to market Transportation Fuels'. The existing policy has been revised after 17 years, the last being in 2002.

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Decreases the entry barrier for private players, the entities seeking authorization would need to have a minimum net worth of Rs 250 crore compared to the current requirement of Rs 2,000 crore prior investment.

No need of prior experience, non-oil companies will be allowed to invest in the retail sector, and the requirement of prior investment in oil and gas sector, mainly in exploration and production, refining, pipelines and terminals among others has been done away with.

The entities seeking market authorization for petrol and diesel are now allowed to apply for retail and bulk authorization separately or both. Interested parties have been given the flexibility in setting up a joint venture or subsidiary for market authorization.

In addition to conventional fuels, new entities are required to sell alternate/new fuels like CNG, LNG, electric-charging etc within 3 years from the date of establishment of the outlet.

With this revision, GOI expects more private, and foreign players to retail fuel marketing, and also expects the new entities to bring newer technologies.

An individual may be allowed to obtain dealership of more than one marketing company in case of open dealerships of PSU OMCs but at different sites.

Lastly, the authorized entities are required to set up minimum 5 percent of the total retail outlets in the notified remote areas within 5 years of grant of authorization for which a robust monitoring mechanism has been set up to monitor this obligation.

Source: Autocar Professional