Entry of new players will drive competition at petrol pumps and benefits domestic consumers of petrol and diesel

Both petrol and diesel are already de-regulated and including private players such as Reliance, Essar, Shell besides the public sector oil retailers Indian Oil, HPCL, BPCL, Mangalore Petrochemicals are present in India’s fuel retailing segment. The entry of more players may lead to differential pricing of petrol and diesel at pumps, a move that is followed internationally by fuel retailers to attract customers at pumps.

Entry of new players will drive competition at petrol pumps and benefits domestic consumers of petrol and diesel

Team EnergyInfraPost

Entry of new players in India’s fuel retailing sector will soon witness a price war at petrol pumps thereby benefiting domestic consumers of petrol and diesel in line with prevailing international practice.

In order to increase competition in the fuel retailing sector, on the back of comparatively lower crude oil prices (from the highs of $145 a bbl to $50 a bbl levels), the petroleum ministry is understood to have given yet another retailing license to Haldia Petrochemical Ltd (HPL), once on the verge of being declared ‘sick’.

Both petrol and diesel are already de-regulated and including private players such as Reliance, Essar, Shell besides the public sector oil retailers Indian Oil, HPCL, BPCL, Mangalore Petrochemicals are present in India’s fuel retailing segment. The entry of more players may lead to differential pricing of petrol and diesel at pumps, a move that is followed internationally by fuel retailers to attract customers at pumps.

Globally, fuel retailing companies like Shell, Caltex, Total, in order to attract consumers are selling petrol and diesel at varying prices in different locations. The same practice may soon come into force with increasing competition in the sector thereby benefiting consumers largely. Media reports also indicate that public sector HPCL is already in the process of trying this model at some of its fuel retailing locations.

After being granted with the retailing license, HPL — which is also India’s second largest petrochemical facility is expected to open fuel retailing facilities across West Bengal. News Reports cited official sources say that the oil ministry has cleared HPL’s proposal to set up 50 retail outlets in four districts of West Bengal.

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Any company that has invested Rs 2000 crore in India’s oil and gas sector is eligible to get a fuel retailing license under the government’s guidelines.

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