You can be on Entrepreneur’s cover!

2 Reasons Why Government Allowed Private Companies to Enter Fuel Retail Business Government relaxed the norms for establishing petrol pumps, giving nod to non-oil ventures to step in the fuel retail business

By Vinayak Sharma

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

PIB

The administration on Wednesday opened up fuel retailing standards, permitting non-oil organizations to set up petroleum pumps to expand competitive standards. Informing reporters about the decision taken by the Cabinet, I&B Minister Prakash Javadekar said the opening up the fuel retailing will build venture and competition.

According to the Information and Broadcasting Minister, Prakash Javdekar, The decision has been taken up the CCEA (Cabinet Committee on Economic Affairs) for giving authorization for marketing of transportation fuel. He also said that "The retailers will necessarily have to set up 5 per cent of the total outlets in rural areas within five years.

Also Read: Will Saudi Aramco's Business Interest benefit Indian Oil Business

Reasons of private firms stepping in Fuel business

Increase in Investment

The new policy will bring in more investment as private domestic and foreign players would foster their interest in the business. With this, more capital influx will be present in the economy. The move will encourage the entry of worldwide business tycoons, for example, Total SA of France, Saudi Arabia's Aramco, BP Plc of UK and Trafigura's downstream arm Puma Energy. Advent of these business magnificos in the Indian market will flourish the Indian petroleum standards worldwide, also will develop interest in the global fuel champions.

Rise in Employment

Country has been facing crisis since months due to its low GDP growth and unstable finance, by the government's policy of augmenting the biggest business sector, it will allow companies to hire more manpower for operating its ventures. In India, more employees are needed to work on company's petrol pumps and its respective centers. To bring it on progressive paths, more hiring would be the need of the hour. Companies with INR 250 crore turnovers can enter fuel retailing, subject to condition that 5% of the outlets will be in rural areas. This will in return increase the rural employment and help in raising rural standards. Reliance Industries is the world's largest oil refining complex and it has less than 1400 outlets, following this policy would increase the number of its outlets and employment on rural outskirts.

According to the Minister of MSME, Road Transport and Highways, Nitin Gadkari said that government is in a bid to develop Delhi Mumbai Highway crossing through Gurugram in Haryana. This highway would be comprised of 300 petrol pumps along with the facilities for the commuters. These ideas would attract foreign and domestic business people to set up their units on the highway for further profits.

Also Read: 3 Tips by Nitin Gadkari to Boost Infrastructure and MSMEs

In the present scenario, a venture would need to invest INR 2000 crore in hydrocarbon exploration and production refining, pipelines or liquefied natural gas (LNG) terminals.

Organizations with a total assets of Rs 250 crore will be permitted to sell petroleum and diesel subject to condition that they introduce facilities for marketing of at any rate one new generation alternate fuel, for example, CNG, LNG, biofuels or electric vehicle charging within three years of beginning of tasks, Information and Broadcasting Minister Prakash Javadekar said here.

Vinayak Sharma

Entrepreneur Staff

Correspondent, Entrepreneur India

Business News

I Designed My Dream Home For Free With an AI Architect — Here's How It Works

The AI architect, Vitruvius, created three designs in minutes, complete with floor plans and pictures of the inside and outside of the house.

Business Ideas

7 Link-Building Tactics You Need to Know to Skyrocket Your Website's Rankings

An essential component of SEO, link building is not just a 'Set them and forget them' proposition, but a dance of skills and strategies.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Entrepreneurs

The AI Tech Leader: Yugandhara Lad, Founder & CEO, Virtualyyst

In 2016, she started Virtualyyst as a Virtual Assistant Service startup, as a side hustle while navigating a demanding 9 to 5 job in the USA

Science & Technology

These Are the Top 6 AI Threats to Your Business Right Now

The modern workforce is forever changed by artificial intelligence. If you fail to understand that we will all need to learn AI to some degree, you haven't been paying attention.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.