25,000 fuel dispensers set for India after oil ministry scraps dealership policy

State oil companies plan to add an unprecedented 25,000 petrol pumps in one shot, nearly half as much as operational today, across the country after the government signalled them to do so, according to people familiar with the matter.

The oil ministry has also scrapped an official policy on petrol pump dealers’ appointment, giving fuel retailers such as Indian Oil, Hindustan Petroleum and Bharat Petroleum the freedom to design their own rules for setting up filling stations, according to industry.

To be sure, not all locations advertised may attract applicants or finally have a petrol pump, but even a 50% success rate could mean an investment of thousands of crores in the fuel retailing business, jobs for tens of thousands of people, and an increased dominance of state firms in a business they already control more than 90%. New pumps also mean more business for equipment suppliers, transporters and tanker manufacturers.

Most importantly, the new eligibility guidelines have scrapped the applicants’ fund requirements and relaxes rules on land ownership, executives said. Applicants were required to posses Rs 25 lakh in bank deposits or other financial instruments for regular outlets and Rs 12 lakh for rural outlets, according to the previous policy. Under new rule, people with no land or a firm tie up with land owner will also be allowed to apply for dealership.