To encourage competition in the otherwise state-dominated fuel marketing business, the Union Cabinet eased entry barriers for Indian and foreign firms. Revisions on guidelines for the granting authorization to market transportation fuels were approved by Cabinet Committee on Economic Affairs on Wednesday.
"The existing policy for granting authorization to market transportation fuels had not undergone any changes for the last 17 years since 2002. It has now 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 this sector," the Cabinet said in a statement.
"The new Policy will give a fillip to 'Ease of Doing Business', with transparent policy guidelines. It will 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 added.
The revisions to rules approved to set up fuel stations in India-
- The entry barrier for private players was lowered. Entities seeking authorisation would need to have a minimum net worth of Rs 250 crore as against the previous requirement of Rs 2,000 crore prior investment.
- Non-oil companies can also invest in the retail sector.
- The entities seeking market authorisation for petrol and diesel are allowed to apply for retail and bulk authorisation, separately or both.
- Companies can set up a Joint Venture or Subsidiary for market authorisation.
- Authorized entities are required to install facilities for marketing at least one new generation alternate fuel, like CNG, LNG, biofuels, electric charging, etc at their proposed retail outlets within 3 years of operating the said outlet.
- New entities are expected to bring in the latest technology for marketing of fuels, encourage digital payments at outlets and employment of women as well as ex-servicemen at the retail outlets.
- CCTV facilities will be set up at all retail outlets.
- Authorised entities will be required to set up a minimum of 5 percent of the total retail outlets in the notified remote areas within 5 years of the grant of authorisation.
- An individual may be allowed to obtain a dealership of more than one marketing company in case of open dealerships of PSU OMCs but at different sites.