Government eases fuel retail norms, allows investment by non-oil companies

New Delhi[India], Oct 23 In a major decision concerning the fuel retail sector, the government on Wednesday eased norms for setting up petrol pumps by allowing non-oil companies and foreign players to invest in the retail sector and permitting a much lower entry barrier for private players.The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the review of guidelines for granting authorization to market transportation fuels.Addressing a press conference here after cabinet meeting, Information and Broadcasting Minister Prakash Javadekar said it marks a major reform of the guidelines for the marketing of petrol and diesel.The policy for granting authorization to market transportation fuels had not been changed since 2002.An official release said the policy has been revised to bring it in line with the changing market dynamics and with a view to encourage investment from private players, including foreign players in the sector.The revised policy, it said, will give a fillip to 'ease of doing business' and boost direct and indirect employment in the sector.Setting up of more retail outlets (ROs) will result in better competition and better services for consumers, it said.The salient features of the policy include a much lower entry barrier for private players.The entities seeking authorisation would need to have a minimum net worth of Rs.250 crore against the current requirement of Rs. 2000 crore.Non-oil companies can also 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 has been done away with.The entities seeking market authorisation for petrol and diesel have been allowed to apply for retail and bulk authorisation separately or both.The companies have been given the flexibility to set up a joint venture or subsidiary for market authorisation.In addition to conventional fuels, the authorised entities are required to install facilities for marketing at least one new generation alternate fuel such as CNG, LNG, bio-fuels, electric charging at their proposed retail outlets within three years.The release said more private players, including foreign players, are expected to invest in retail fuel marketing leading to better competition and better services for consumers.Entities will also encourage the employment of women and ex-servicemen at the retail outlets.The authorised entities are required to set up a minimum 5 per cent of total retail outlets in the notified remote areas within five years of grant of authorisation.An individual may be allowed to obtain dealership of more than one marketing company in case of open dealerships of PSU oil marketing companies but at different sites.

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