Supermarkets in India may soon sell petrol, diesel

If the reforms are implemented, multi-brand retail majors such as Future Group and Reliance Retail might enter the fuel retail space.

Illustration: Uttam Ghosh/Rediff.com

In a bid to make fuel more accessible, the government could soon allow supermarkets to sell petrol and diesel.

The Ministry of Petroleum and Natural Gas is likely to come up with a Cabinet note for easing existing norms, said a source.

The note might be ready within the first 100 days of this government, which was sworn in on May 30.

The note is likely to propose lowering the minimum requirement for companies entering the retail fuel segment, such as having basic infrastructure investment of about Rs 2,000 crore in the domestic market, or providing bank guarantees for 3 million tonnes of crude oil or equivalent amount.

If the reforms are implemented, multi-brand retail majors such as Future Group and Reliance Retail might enter the fuel retail space.

Global majors such as Saudi Aramco might also enter the market, attracted by the easier norms.

The idea of allowing supermarkets to sell fuel is inspired by the success of the model in the United Kingdom (UK).

According to an estimate of the Petrol Retailers Association (PRA), which represents independent forecourt owners in the UK, supermarket sites account for around 49 per cent of the  petrol and 43 per cent of all diesel sold in that country in April this year.

Supermarket players that currently have fuel forecourts in the UK are Tesco, Sainsbury, Asda, and Morrison.

A committee headed by economist Kirit Parikh had suggested easing norms in India.

The other members on the committee were former petroleum secretary G C Chaturvedi, former Indian Oil (IOC) chairman M A Pathan, and Ashutosh Jindal, joint secretary in charge of marketing under the petroleum ministry.

According to the data available with the Petroleum Planning and Analysis Cell, for 20 months in a row, petrol consumption grew in April, registering 7.6 per cent increase as compared to the same month last year.

To make access to fuel easier, the concept of home delivery of diesel had kicked off on March 16 last year in Pune.

State-run fuel retail companies such as IOC, Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) are currently providing home delivery of diesel in Pune, Delhi, Jaunpur, Chennai, Bengaluru, Aligarh, Rewari, Udaipur, and Navi Mumbai.

Some cities like Navi Mumbai are selling around 150 kilolitres a month through home delivery.

The service is availed of by the construction sector in the region.