The Ministry of Petroleum and Natural Gas has expressed disappointment at the low number of allocations for new fuel retail outlets (petrol pumps). In a letter to Bharat Petroleum Corporation (BPCL), the industry coordinator on behalf of the public sector oil companies, the Oil Ministry has asked why the draw of lots was conducted for less than half of the envisaged petrol pumps.
“It is observed that till date, the draw of lots has been conducted for less than 50 per cent of the locations and accordingly around 32,000 Letters of Intent (LOI) have been issued so far,” the letter from the Ministry of Petroleum and Natural Gas said.
“Also, it has been seen that OMCs have cancelled many locations due to wrong nomenclature in advertisement and several locations have either received nil response, or nil selection has been made,” the letter added.
According to the petroleum ministry, there is a need to set up many more fuel retailing outlets in view of the construction of new roads, highways, e-ways, and economic corridors. It also reiterated the obligation on oil companies to set up petrol pumps at remote areas, in a bid to ease fuel accessibility to consumers. This is required to ensure that oil marketing companies (OMCs) do not end up concentrating only on urban areas where consumption is higher, leading to better earnings.
The mandate to set up fuel retailing outlets in rural and low volume areas is also on new licensees that have been allowed access to India’s growing market under liberalised terms. Five per cent of the total outlets that new licensees need to set up have to be in rural areas within 5 years of them commencing operations.
The petroleum ministry has asked BPCL to submit a proposal for fresh advertisement on behalf of the industry indicating OMC-wise numbers of locations in the proposal.
But this is not the only front where OMCs are battling with respect to fuel retail outlets. In another communication, the petroleum ministry has asked public sector OMCs to comply with a Rajasthan High Court directive, asking them to consider a revision of dealer margins payable to fuel pump operators.
“The competent authority of respondents shall consider and decide the same in accordance with law and do the needful as early as possible preferably within a period of twelve week,” the Rajasthan High Court order read.
The order was in context of a plea from the Rajasthan Petroleum Dealers Association seeking a hike in dealer margins. The OMCs have been established as being the competent authority to decide on the revision.
“Representations regarding revision of Dealer’s Commission received in the Ministry of Petroleum and Natural Gas are forwarded to BPCL as coordinator of OMCs to provide a suitable reply at their end,” the petroleum ministry said in response to an right to information query filed by petrol pump dealers through their advocates.
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