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Govt seeks details from Shell on its retail plan

New Delhi, March 27 (PTI): The government has asked Royal Dutch Shell — world’s number three oil and gas group — to furnish more details of its plan to set up about 2000 petrol stations in the country before it can be granted licence to sell petrol and diesel.

“The company has been asked to furnish details of the petrol stations it plans to set up in remote and low service areas,” government sources said.

According to the norms, 11.6 per cent of the total retail strength has to be put up in remote and low service areas.

Shell, in its application to the petroleum ministry for a retail licence, has not provided state-wise details of the retail outlets it plans to set up in remote and low service areas, sources said.

The company, which has also bid for acquiring the government stake in state oil refiner Hindustan Petroleum Corporation Ltd, has sought a licence to sell petrol and diesel in lieu of the investment it would make in the LNG (liquefied natural gas) import and regassification terminal at Hazira in Gujarat.

At present, petro-marketing rights are contingent upon a company investing or proposing to invest Rs 2000 crore in oil and gas exploration, refining, pipeline or terminals.

Sources said Shell had in its application, made to the petroleum ministry earlier this month, indicated that it has till now invested Rs 1000 crore in the 5 million tonnes per annum capacity LNG import terminal in Gujarat.

Shell, sources said, has indicated it would “as far as possible” source petroleum products from domestic refiners, failing which it had the option to import petrol and diesel for retailing in India.

Petroleum ministry had earlier agreed to Shell’s request to allow it to freely import petrol, diesel and jet fuel for retailing in India. Necessary changes have to made 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, the government’s canalising agency.

Though crude oil import was 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, may import petrol and diesel at the Hazira port 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.

Sources said the petroleum ministry, which is doubling up as oil sector regulator till the passage of the Petroleum Regulatory Board Bill by Parliament, would also verify the investment made by Shell in India before granting it the licence.

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