Financial Daily from THE HINDU group of publications
Tuesday, May 13, 2003
Financial Daily from THE HINDU group of publications Tuesday, May 13, 2003 |
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Retailing Government - Policy Shell gets licence to open retail outlets Our Bureau
NEW DELHI, May 12 THE wheel has turned a full circle with the Government allowing Royal Dutch/Shell to set up outlets across the country to retail petrol and diesel. Around three decades ago, the Anglo-Dutch petroleum major's retailing business abruptly came to an end when it was nationalised in 1972 and rechristened Bharat Refineries Ltd and later Bharat Petroleum Corporation Ltd. The company through its subsidiary, Shell of India Ltd, had applied for a licence to set up 2,000 retail outlets. The authorisation is contingent on the company furnishing a bank guarantee of Rs 500 crore towards fulfilling a commitment to invest Rs 2,000 crore in the petroleum sector, which it plans to achieve by the end of fiscal 2003. Shell had sought a provision whereby in case it found the retailing business unviable and exits the business, it should be refunded the bank guarantee. According to officials, the Government has allowed refund of the amount provided the retail outlets are not put into commercial operation, for instance at the land acquisition stage. When contacted, company officials declined to comment on the retailing authorisation. According to the authorisation, the company will require to set up 11 per cent of its proposed retail outlets in far-flung areas. To regulate this commitment, the company will require an agreement with the Government. Shell, which is in the process of setting up a LNG terminal in Hazira, Gujarat, has expressed its intent to bid and acquire the privatisation-bound Hindustan Petroleum Corporation Ltd, which has a 20 per cent market share in the transportation fuel retailing business. It has become the fifth company to be granted marketing rights since the retailing business in the petroleum sector opened up by the Government on April 1, 2002. The other players include Reliance Industries (5,849 outlets), Essar Oil Ltd (1,700 outlets), Oil and Natural Gas Corporation (600 outlets) and Numaligarh Refinery Ltd (510 outlets).
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