India Plans to Reorganise Allocation of Fuel Service Stations

  The government is planning to change the system of allocation. Instead of the existing system where applicants are graded after an interview, there will a draw of lots among the eligible candidates.

Fuel service stations in India are keenly sought after by many as they are perceived to have minimum risk and ideal for developing a good retail business. Many dealer service stations are owned by family members of politicians and other well-connected people, and in several cases, there are complaints of irregularities and nepotism in the allocation of fuel service stations.

Oil industry executives are sceptical about the government's initiative as state-run firms are already suffering from the non-deregulation of diesel and commercial fuels.

Selection of dealers on political rather than commercial considerations is bad for the fuel retail sector as it does not reflect the commercial reality of subsidies. However as there are guaranteed margins for dealers that operate state oil company sites, it also highlights the “political” allocation. 

Take away subsidies and guaranteed margins, the focus will quickly switch to the commercial operation and profitability of the fuel service station and its ancillary services.

The PetrolWorld Forum in Goa is an ideal opportunity to ascertain the real countdown to diesel deregulation as well as ascertain the equipment and services requirements of the new and ever expanding network. PetrolWorld 200112