The recent coming together of Essar, Reliance and Shell to file a case with the petroleum regulator against their state-run counterparts for selling fuel at below-cost prices is a significant move.
So far, the private oil marketers have been seeking, in vain, parity with the oil PSUs through executive fiat. They have repeatedly asked for the off-budget support, or oil bonds, that the latter get as part-compensation for selling fuels at controlled prices. Now, they have sought it under the specific law (PNGRB Act) that says the regulator must promote competition.
But it makes no sense to accuse the oil PSUs—there’s no predatory pricing on their part. The problem is with the government’s abuse of dominant power. It opened up fuel retailing in 2002 but delivered a dud. Losses discourage private play. And given the quota raj in allotting PSU petrol pumps, consumers suffer poor competency as well as adulteration.