The government is considering further relaxing the rules for setting up petrol pumps in India, the world’s fastest growing fuel market, to match the changing energy security needs and its pledge towards decarbonisation, according to an official order.
In 2019, the government eased the licensing process, allowing non-oil companies to enter the fuel retail sector. Companies with a net worth of Rs 250 crore could sell petrol and diesel if they committed to establishing infrastructure for at least one alternative fuel such as CNG, LNG, biofuels, or EV charging within three years of starting operations. For those wishing to cater to both retail and bulk consumers, the net worth requirement was Rs 500 crore.
The Ministry of Petroleum and Natural Gas has now formed an expert committee to review these 2019 guidelines. The panel will evaluate how effective the current framework has been in ensuring energy security and market efficiency, align the policy with national goals for decarbonisation and promotion of alternative fuels, and address any implementation issues. The committee is led by Sukhmal Jain, former director of marketing at a major public sector oil company, along with three other senior industry officials.
A notice issued on August 6 invited feedback from stakeholders and the general public within 14 days.
Before 2019, companies needed to invest or commit Rs 2,000 crore in activities such as exploration, refining, pipelines, or LNG terminals to obtain a retail licence. The relaxed rules reduced the financial barrier and required retail license holders to open at least 100 fuel outlets, with 5 per cent located in rural areas within five years.
Global fuel companies have long been interested in the Indian market. Several international and domestic players have applied for Petrol licences, while state-run firms currently operate most of the country’s 97,804 fuel stations. Indian Oil Corporation leads with 40,666 pumps, followed by Bharat Petroleum with 23,959 and Hindustan Petroleum with 23,901. Private players like Reliance-BP, Nayara Energy, and Shell have a smaller presence, though they continue to expand.
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