New Delhi: In a landmark oil sector reform, the government on Wednesday relaxed rules for setting up petrol pumps and allowed non-oil companies to venture into the business in the world’s fastest-growing fuel retailing market. The relaxed rules, which includes a far lower investment threshold for entering fuel retailing, is expected to help private and foreign firms to move into this lucrative market.
At present, to obtain a fuel retailing license in India, a company needs to invest Rs 2,000 crore in either hydrocarbon exploration and production, refining, pipelines or LNG terminals. However, this rule has now been changed.
“Companies with a net worth of Rs 250 crore will be allowed to sell petrol and diesel subject to the condition that they install facilities for marketing of at least one new generation alternate fuel such as CNG, LNG, biofuels or electric vehicle charging within three years of start of operations,” Union I&B minister Prakash Javadekar said, briefing reporters about the decision taken by the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi.
The retailers will have to set up 5 per cent of the total outlets in rural areas within five years, he said. “The new policy will bring in more investment and give a fillip to Ease of Doing Business. It will boost direct and indirect employment in the sector,” Javadekar said.