Shares of oil marketing companies (OMCs) such as Bharat Petroleum Corpation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) slipped up to 5 per cent in the early deals on the NSE on Thursday after Cabinet Committee on Economic Affairs (CCEA) opened up fuel retailing norms and allowed non-oil companies to set up petrol pumps to increase competition.
Individually, BPCL slid up to 5 per cent to Rs 500.65, HPCL dipped up to 3.3 per cent to Rs 298.5 per cent, and Indian Oil Corporation (IOC) slipped up to 2 per cent each to Rs 141.4. A total of 3.8 million shares of BPCL, 1.5 million shares of HPCL, 2.2 million shares of IOC have changed hands on the NSE and BSE till the time of writing of this report.
"The existing policy for granting authorization to market transportation fuels had not undergone any changes for the last 17 years since 2002. It has now been revised to bring it in line with the changing market dynamics and with a view to encourage investment from private players, including foreign players, in this sector," the government said in a statement.
With this, new players in the fuel-marketing space like Total, Adani, and Saudi Aramco -- and even super markets -- can open outlets for selling automobile fuel. The government also scrapped a rule that mandated a company to commit at least Rs 2,000-crore investment in the petroleum sector. READ REPORT HERE
Under the scheme, new players would need a minimum net worth of Rs 250 crore vis-à-vis the current requirement of Rs 2,000 crore prior investment, non – oil companies would also be allowed to invest in the retail sector, and requirement of prior investment in Oil and Gas Sector, mainly in exploration and production, refining, pipelines/terminals etc., has been done away with.