Foreign energy giants such as Saudi Aramco, Total and Trafigura may soon enter the Indian market with a major upcoming reform that the government plans to commercialize.

Sources quoting sources close to the case suggest that the Ministry of Oil had prepared a proposal by the government to remove the pre-existing rule restricting the marketing of gasoline, diesel and jet fuel to companies that had invested or intended to invest 2,000 crores in exploration. and production pipelines or refinery terminals in the country.

The Ministry is also consulting the Ministries of Finance, Trade and Law on the same proposal which adopted the recommendations of the proposal prepared by an official panel consulted in March 2002 on the granting of a license for the marketing of fuel for transport . The report was submitted at the end of May this year.

The above-mentioned group of experts proposed to remove the minimum investment limit imposed by companies as a condition of licensing, while introducing a minimum limitation of net worth for license applicants. Other suggestions include the opening up of the sector to non-oil companies, the imposition of strict deadlines for the installation of fuel pumps and sanctions for non-compliance with deployment plans.

In the current climate, the minimum investment rule is the main obstacle for foreign players seeking to enter Indian territory. In 2018-2019, demand for gasoline, diesel and jet fuel increased by 8%, 3% and 9% respectively.

Changing these standards could also encourage supermarket chains to launch their own gas pumps. Although this can generate a significant revenue stream for supermarkets, ensuring a safe space for pump installation in cities will become a major challenge. In addition, the group is asking companies to apply for separate licenses for retail and bulk activities. A company seeking a retail fuel license must have a minimum net worth of Rs250 crore. And if the same company wishes to obtain a block marketing license, it must have a net worth of at least 500 crore. .