The government has decided to allow Shell India Private Limited (SIPL), a subsidiary of the Shell group of companies, to market transportation fuel in India.
Shell will now be able to set up its petrol pumps all over India after three decades. Shell was nationalised in 1972 and became Bharat Petroleum Corporation Limited.
The authorisation is, however, subject to the company furnishing a Rs 500 crore bank guarantee to the government.
This will go towards fulfilling its commitment of investing Rs 2,000 crore in building infrastructure in the hydrocarbon sector. SIPL will also have to stick to the yearly investment target set by the government.
The company will also be required to set up 11 per cent of its retail outlets in far-flung areas, according to an official press release issued here today. SIPL plans to set up around 2,000 retail outlets across the country.
The company informed the government that it would prefer to source its supplies from domestic refineries. It also plans to make use the installations and depots of public sector oil companies in the country.
“This decision goes a long way towards fulfilling the government’s goal of bringing in more players in the marketing of transportation fuel so that consumers have a wider choice of quality products and services. At the same time, the new entrant in the lucrative marketing segment of the Indian petroleum sector has to commit investment for creating more infrastructure in the country,” the press release said.
In addition to the 20,000 retail outlets run by the public sector, the government has granted marketing rights to the Reliance group (5,849 outlets), Essar Oil (1,700) ONGC (600) and Numaligarh Refinery (510).
These entities would also have to fulfill the government’s condition of investing in infrastructure in the hydrocarbon sector.
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