Adani Gears Up to Enter Petrol-Diesel Retail; Govt Considers Easing License Norms

Business News: The Ministry of Petroleum and Natural Gas is considering changes to the current rules governing the retail sale of petrol and diesel in India. This move aims to relax the existing licensing standards to better align with the evolving global fuel landscape and the growing emphasis on alternative energy sources. An expert committee has been formed to review the guidelines issued in 2019 and recommend improvements. The panel will assess how current regulations impact India's goals related to energy security, carbon emission reduction, and the promotion of alternative fuels.

Committee Members and Their Role

The committee is chaired by Sukhmal Jain, former Director (Marketing) of Bharat Petroleum Corporation Limited (BPCL). Other members include P. Manoj Kumar, Director General of the Petroleum Planning and Analysis Cell; PS Ravi, a member of the Federation of Indian Petroleum Industries (FIPI); and Arun Kumar, Director (Marketing) at the Ministry of Petroleum and Natural Gas.

Their primary objectives are to propose updates to existing policies, recommend measures to encourage the use of alternative fuels and electric vehicles, and identify challenges in implementing the guidelines effectively.

Key Differences Between the 2019 Rules and Proposed Changes

In 2019, the government amended fuel retail regulations, permitting non-petroleum companies to enter the sector if they possessed a minimum net worth of ₹250 crore. Firms aiming to operate both retail and wholesale fuel distribution were required to have a net worth of at least ₹500 crore.

Before this, firms had to demonstrate a commitment to invest ₹2,000 crore in the energy sector to qualify for a fuel sales license. The new proposals aim to simplify these requirements, potentially making it easier for companies to open petrol pumps and expand their presence.

Current Market Landscape

India currently has 97,804 petrol pumps, with government-owned companies dominating the sector. Indian Oil operates 40,666 pumps, Bharat Petroleum Corporation Limited (BPCL) runs 23,959, and Hindustan Petroleum Corporation Limited (HPCL) manages 23,901 pumps. In the private sector, the Reliance-BP joint venture operates 1,991 pumps, Nayara Energy has 6,763, and Shell manages 355 outlets.

Several global energy giants, including Total Energies (partnered with Adani), BP (with Reliance), Trafigura’s Puma Energy, and Saudi Aramco, have expressed interest in investing in the Indian fuel retail market. Relaxation of the rules could pave the way for easier entry and expansion by these multinational companies.