New Delhi, Nov 23: The government is mulling restricting private-sector Essar Oil Ltd and Reliance Industries Ltd from selling diesel to bulk consumers until they fulfil their retail service obligation of supplying the fuel in country's remote and backward areas. Essar and Reliance were given the licences for retailing petrol and diesel on the condition that they would set up 11 per cent of their total petrol stations in remote and low service areas. While the petrol stations have yet to come up, both are selling the fuel to large-volume consumers.
"We may consider permitting the companies, who have marketing rights, to market a fixed percentage of their sales as direct sales. However, this permission should be given after the fulfillment of retail service obligation by them in addition to the investment of Rs 2000 crore to be made by them," says an internal paper of the Petroleum Ministry.
It reasons that the government resolution allowed for granting marketing rights essentially for sale through retail outlets and no arrangements were made for bulk marketing to direct customers.
Diesel from private firms is quoted at Rs 500 per kilolitre below the price offered by state-run oil firms.
The government last year granted a licence to Reliance Industries Ltd to set up 5849 petrol stations in the country while Essar Oil was given an authorisation for 1700 outlets. This year, Royal Dutch/Shell was permitted to set up 2000 petrol stations.
Bureau Report