The Hindu Business Line : Govt not to change norms for petroleum retail business

Retail entry
MNCs and domestic companies had sought review of existing norms.
Ministry decided to stick to existing norms to keep out non-serious players.
Plan panel in its mid-term appraisal had suggested changes in Rs 2000-cr norm.

New Delhi , March 15

Companies planning to venture into the retailing business of petroleum products will have to meet the investment criteria of Rs 2,000 crore.

The Petroleum Ministry, which reviewed the prescribed norms for the petroleum products retail business, including the investment criteria prescribed for new entrants, has decided to continue with the existing norms which stipulate that those seeking permission to venture into retail business would have either invested or committed to invest Rs 2,000 crore in the petroleum sector over a 10-year period.

Multinationals as well as domestic private sector players had sought a review of the existing norms, official sources said. But the Ministry took the view that because of the high stakes involved in this business and also to keep out non-serious players, it would be in the larger interest of all stakeholders that the existing system continues.

Since the retailing business in the petroleum sector was opened up on April 1, 2002, the Petroleum Ministry has granted marketing rights to Reliance Industries Ltd for close to 5,849 outlets, Essar Oil (initially 1,700 outlets), Shell (2,000), Oil and Natural Gas Corporation (1,100), Mangalore Refinery and Petrochemicals (MRPL) (500) and Numaligarh Refinery Ltd (510). However, it was noticed that the companies have lagged behind in setting up the desired number of retail outlets.

While Reliance has commissioned 1,086 outlets, Shell has 10 outlets, Essar 517, Numaligarh Refinery 23, MRPL nil and ONGC has one. This had prompted the Ministry to review whether the minimum investment criteria of Rs 2,000 crore for companies proposing to enter the transportation fuel (petrol and diesel) marketing business had served any purpose or could be lifted.

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