Centre Mulls Over Relaxing Petrol Pump Licensing Rules To Expand Footprint

The central administration is mulling over easing norms for installing new petrol pumps in India, the world's fastest growing fuel market, inclusive of its energy security strategy and focus on decarbonisation, as per media reports.

A four-member committee for the same will be chaired by Sukhmal Jain, ex-Director for Marketing at Bharat Petroleum Corporation Ltd (BPCL). Other members are -

PS Ravi, representative from the Federation of Indian Petroleum Industry (FIPI)
P Manoj Kumar, Director General, Petroleum Planning and Analysis Cell (PPAC)
Arun Kumar, Director (Marketing), Ministry of Petroleum and Natural Gas

A notice dated August 6 has asked for comments on the same, especially from the stakeholders and public within the following 14 days.

What Rules Have Been Altered?

Till 2019, the companies requiring a fuel retail license had to either invest or commit Rs 2,000 crore in oil exploration, refining, pipeline and LNG terminals.

The 2019 reforms reduced this requirement, allowing:

Net worth of Rs 250 crore to sell petrol and diesel in the retail market (with a mandate to set up at least one alternative fuel infrastructure such as CNG, LNG, biofuels or EV charging within three years)
Net worth of Rs 500 crore to sell to both retail and bulk consumers
Retail licence holders must establish at least 100 outlets, with 5 per cent of them in rural areas within five years.

Also Read: India's ₹20,000 Crore Export-Centric Initiative To Elevate Brand India

What Makes The Review Significant? 

Global energy majors have long been eyeing the Indian fuel retail space, but state-run oil marketing companies still dominate the market of 97,804 petrol pumps.

Indian Oil Corp (IOC) leads with 40,666 outlets
BPCL has 23,959
HPCL has 23,901

Private entities like Nayara Energy, Shell, and Reliance-BP, have a smaller footprint, though interest from global giants remains strong. On the other hand, TotalEnergies with Adani, BP with Reliance, Puma Energy, and Saudi Aramco have all explored entry or expansion.