A bump in the road for private fuel retailers

A bump in the road for private fuel retailers

Price controls on transport fuels are likely to hurt the expansion of private petrol pump chains of Rosneft-led Nayara Energy, Shell Plc and Reliance Industries amid concerns that rising global crude prices and approaching elections may tempt the government to give a heavy subsidy to sales by competing outlets of state firms.

The announcement brought a sense of déjà vu to private fuel retailers. India freed up petrol prices in 2010 and diesel prices in 2014, that allowed private retailers to reopen their pumps that were mothballed for years after the government allowed price controls to snap back a decade ago.

The first round of fuel deregulation, in the early 2000s, had lasted just a few years, during which Essar Oil and Reliance Industries had made a significant dent in the state monopoly in fuel retailing. However, public anger after crude oil’s rise to record levels forced the government to resume heavy that made private sales unviable. Read More

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