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Shell files for petrol pump licence

New Delhi, March 7 (PTI): Royal Dutch Shell today applied for a licence to sell petrol and diesel from about 1,500 petrol stations in India.

Shell India manager for business development S. Ravi made a formal application for the authorisation to set up retail outlets along with an application fee of Rs 10 lakh to the petroleum ministry, said senior officials.

The company has the option to import petrol and diesel through the government canalising agency, Indian Oil Corporation (IOC), or tie up with domestic refiners.

Petroleum ministry had earlier agreed to Shell’s request to freely import petrol, diesel and jet fuel (aviation turbine fuel) for retailing in India. Necessary changes were required in the Export-Import Policy, for which the ministry had approached the ministry of commerce and industry.

At present, petroleum product import is allowed only through Indian Oil Corporation. Though crude oil imports had been de-canalised last year, petro product imports remained under the canalised category as imported petrol and diesel could be sold at a cheaper rate under the given duty structure. “Duty structure too would be changed accordingly,” sources said.

Shell, which operates more than 46,000 petrol stations and has interests in about 50 refineries worldwide, has sought marketing rights in lieu of its proposed investment in setting up the 5-million-tonne capacity Hazira LNG terminal.

Marketing rights to retail petrol and diesel are contingent on investment of a minimum of Rs 2,000 crore in oil infrastructure like exploration, refineries, pipeline or terminals.

Sources said Shell India may import petrol and diesel at its Hazira port in Gujarat from its 4,30,000-barrels-per-day Bukom refinery in Singapore. Some 90 per cent of Bukom’s product are exported in the region and beyond.

The petroleum ministry, which is doubling up as oil sector regulator till the passage of the Petroleum Regulatory Board Bill by Parliament, would verify the investment made by Shell in India and whether the application meets the stipulation of setting up 11.6 per cent of the total retail strength in remote and low service areas.

As per the rules, companies proposing to invest Rs 2000 crore in oil exploration, refining and terminals are required to furnish a bank guarantee of Rs 500 crore for obtaining authorisation to retail petrol and diesel.

Eight companies, including Reliance Industries, Essar Oil, Cairn Energy, Oil and Natural Gas Corporation and Oil India had qualified for grant of petro marketing rights by investing Rs 2000 crore. Out of these, RIL has received authorisation to set up 5,849 retail outlets, Essar Oil 1,700 and ONGC 600. Besides, Numaligarh Refinery too has got marketing rights.

Sources said Shell India has sought to procure petro retailing rights in lieu of its proposed investment of $ 500 million in setting up the LNG terminal at Hazira in Gujarat.

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