In a recent development the Government of India has granted permission to Europe’s third largest oil company the British Petroleum to set up 3,500 petrol pumps across the subcontinent. With the entry of BP Plc it has become the 10th player which will sell fuel in India. Earlier BP was only allowed to sell aviation turbine fuel in the country.
BP is the second company from overseas which has got the permission for selling fuel only after the Netherlands based company Shell. Government of India deregulated the price of petrol and diesel since June 2010 and October 2014 respectively, which lead to the entry of private players such as British Petroleum. Right now the fuel sector is mostly dominated by government owned companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum, while some private firms such as Reliance, Essar and Shell has marginal presence in this business.
Alongside BP, the petroleum ministry has also given the permission to the Haldia Petrochemical to set up petrol pumps to start retailing fuel. The Kolkata based company has plans to set up 50 pumps in parts of West Bengal and Bihar.
The British company has bought 30% interest in 21 exploration blocks of Reliance industries for 7.2 billion. As per the current policy by the Government of India an organization who is contributing or proposing to invest at least Rs 2,000 crore in exploration, production, refining, pipelines, or terminals is eligible of marketing transportation powers including petrol, diesel and aeronautics turbine fuel (ATF).
Due to the increased demand of energy and fuel, India has already imported 202.9 million tons of crude oil in 2016, which is way more higher than 2015. The demand of petroleum products has seen a sudden rise during August 2016, which is highest in last five years. The demand increased mostly due to the growth of petrol and diesel’s growth of 25% and 14% respectively