The government has opened up the hitherto state-dominated fuel retail market by allowing private players, including foreigners as well as non-oil companies, to set up petrol pumps in the country. However, those looking for a licence to retail hydrocarbons need to open at least 100 outlets, with 5% of those in designated remote areas. This liberalisation would bring in the much-needed competition as well as capital into one of the world’s fastest-growing fuel markets. As per the norms released on 26 November, licensees must set up stations for dispensing at least one new-generation alternative fuel—such as CNG, a bio-fuel, LNG—or put up electric charging points within three years of a pump starting operations.
The norms are in sync with the government’s effort to push automakers towards environment-friendly modes of mobility. It’s clear that various vehicles will have to co-exist for years to come. Millions of Indians have yet buy their first car—the number of passenger cars is expected to rise six-fold in the next 20 years—and so the market potential is enormous.
What fuel pumps need clarity on, meanwhile, is what charging formats would be needed for electric vehicles (EVs)—and, crucially, how long a vehicle would need to stay parked for this. Space availability could prove a big problem if a large number of EVs need to juice up simultaneously. But then, if cash-rich energy majors such as Saudi Aramco enter the fuel retail space, we could see large-sized stations of the kind rarely seen in India. Britain’s BP has already partnered with Reliance Industries Ltd to set up thousands of pumps in the country, while Total has joined hands with the Adani group to roll out 1,500 outlets. Perhaps they would have arrived at a model that could serve both fossil fuel vehicles and EVs.