Govt opens fuel retail market for non-oil companies ahead of BPCL, HPCL selloff
NEW DELHI: The government on Wednesday laid the ground for eventual full-on price competition in the fuel retail market by easing entry norms to end the dominance of state-run retailers and opening up the business for non-oil companies with a minimum net worth of Rs 250 crore.
This is the biggest fuel market reforms since 2002, when the NDA-1 government under Atal Bihari Vajpayee had deregulated oil pricing for the first time. The step will assure foreign investors about the Narendra Modi government’s commitment to market-driven economy at a time the Centre is planning to hive off India’s second- and third-largest fuel retailers — BPCL and HPCL.
Clearing the latest reforms, based on recommendations of a panel under Kirit Parikh, the Cabinet’s panel on economic affairs also put two conditions for the new entrants that will encourage alternate or cleaner mobility solutions.
The new entrants will have to offer at least one of the three alternatives to petrol and diesel — electric vehicle charging facility, CNG (compressed natural gas) or LNG (liquefied natural gas) for heavy vehicles — at their retail outlets within three years of becoming operational.
