India has relaxed entry barriers into its domestic fuel retailing market. The revised rules lower the minimum investment commitment from INR20bn (US$282m) to INR2.5bn (US$3.5m), authorising non-oil firms to invest in the retail sector. In return, new entrants must establish 5% of their proposed service stations in rural areas, and construct facilities to offer at least one alternative fuel (CNG, LNG or electric charging) within three years.
The objective is to foster competition, and lower prices, with the entrance of more private players, including foreign actors. Saudi Aramco, Puma Energy (Trafigura) and Total have expressed interest in investing in India’s fuel retailing market. Indian fuel market remains dominated by public companies, with Indian Oil owning 42.9% of the service stations, Hindustan Petroleum 23.9% and Bharat Petroleum 22.9%. Private players have only a 10% market share.
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