State-owned oil companies move poll panel to allot 31,800 new fuel outlets

Ahead of announcement of poll schedule on March 11, the companies had already initiated the process by issuing LoIs to successful bidders for 2,579 locations on February 21

The three public-sector oil marketing companies — Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) — have approached the petroleum ministry to seek exemption from the election commission for going ahead with the allotment of at least 31,800 petrol pumps, at a time when the model code of conduct is already in place.

Though bids were invited for 78,493 locations, only 31,800 places were finalised prior to the election notification. Ahead of the announcement by the poll panel on March 11, the companies had already initiated the process by issuing letters of intent (LoIs) to successful bidders for 2,579 locations on February 21.  The bidding process had kicked off in November last year and bids were opened in January.

“OMCs are of the view that as the decision on clearing 31,800 outlets were taken prior to the elections and since it was a business decision by the companies, election commission is unlikely to have an objection on it,” confirmed an industry source. The three companies put together had got over 400,000 applications for the total 74,608 or 95 per cent of the areas that were on offer.

 

This was part of the strategy by the OMCs to maintain their market leadership and expand footprint in major geographical areas. The 31,800 areas that may go before the election commission for clearance include 20,000 with single bids and another 11,800 locations, for which winners were finalised on a draw.

In order to have hassle-free bidding and to avoid manual interference, a software application was developed by MSTC, a public sector undertaking under the Ministry of Steel, keeping the oil companies at arm’s length from the selection process. The companies will also be covering the pendency of over 5,000 retail outlets for scheduled castes during the current round.

During the current round, only 3,885 areas were left unbid, while 30,490 areas got single bids and 44,118 locations got multiple interests. States that have got the maximum number of areas include Rajasthan and Uttar Pradesh (UP) with 9,621 and 9,027 areas, respectively. On the other hand, areas in states like Madhya Pradesh, Maharashtra and Tamil Nadu got maximum number of takers.  

On the other hand, the companies have stopped receiving fresh applications for the government’s flagship Pradhan Mantri Ujjwala scheme, following the announcement of elections. However, around 2 million applications that were cleared prior to the poll panel announcements will be allotted within this financial year. So far, the state-run companies have allotted 71.5 million connections under the scheme that was started in May 2016. Owing to the success of the scheme, LPG penetration in the country has also increased from a mere 62 per cent in 2016 to 90 per cent now. The number of LPG consumers in India has increased from 148 million on March 31, 2015 by around 77 per cent to 261.6 million now.