Wobbly demand dampens gas scheme: Major cos give it a miss

AN UNCERTAIN demand situation has postpone main gamers from making use of for gas advertising and marketing licences, beneath the relaxed norms for entry into retail gas advertising and marketing, in accordance with authorities sources.
The Indian Express has learnt that solely eight corporations have utilized for advertising and marketing licences beneath the relaxed norms, notified in October 2019,of which six have been accredited. Adani-Total Fuels Marketing Ltd, which had indicated that it could apply beneath the brand new norms, has additionally not utilized. Saudi Arabia’s nationwide oil firm, Saudi Aramco, and the Abu Dhabi National Oil Company, which have been additionally contemplating collectively coming into the gas retail house in India, haven’t utilized.
Experts mentioned uncertainty round demand for gas through the Covid pandemic might have been an element behind main firms delaying their plans.
The Petroleum Ministry had relaxed necessities for entry into the gas advertising and marketing house, together with the requirement {that a} participant ought to have investments of Rs 2,000 crore in crude oil exploration and manufacturing, refining, pipelines or terminals. The easing in norms had additionally included a requirement that 5 per cent of all new shops must be launched in distant areas to make sure better unfold of gas availability.
“There haven’t been any applications from any major players,” mentioned a authorities official, including the federal government had accredited six of the eight functions for licences beneath the brand new norms. The official famous that Reliance Petro Marketing Ltd, which has a licence to market gas to retail prospects, had sought and obtained licensing to enter bulk advertising and marketing.
Sources advised The Indian Express that Adani-Total was within the strategy of finding out the market alternative for gas retailing, together with CNG, Bio-CNG and electrical automobile charging factors, earlier than popping out with an built-in plan. The new laws mandate that every one new retail factors additionally supply at the least one various gas, comparable to CNG, biofuels, liquefied pure fuel, electrical automobile charging factors, at their shops.

The Ministry of Petroleum and Natural Gas and Adani-Total didn’t reply to requests for remark.
Demand for diesel and petrol, which have been severely impacted by the pandemic, haven’t but totally recovered to pre-Covid ranges. Total gas consumption in India fell 9.1 per cent in FY21 because of the influence of Covid-related restrictions. Demand has nonetheless not recovered totally to pre-pandemic ranges this fiscal, with gas consumption within the first quarter of this fiscal down 12.2 per cent, in comparison with Q1FY20.
“Anyone who is considering setting up retail fuel outlets would like demand to return to pre-Covid levels and for the growth trajectory to come back,” mentioned Vivekanad Subbaraman, analyst at Ambit Capital, including the autumn in demand had impacted gas retailers which have in any other case seen a gradual enhance of their margins on fuels over the previous decade.
Experts additionally famous that prime excise duties, pushing up petrol and diesel costs, have been additionally possible contributing to uncertainty amongst potential entrants.
“Demand is not insulated when prices are so high,” mentioned an knowledgeable. Petrol and diesel costs are at the moment at all-time highs in numerous components of the nation. Last yr, the federal government elevated the excise responsibility on petrol by Rs 13 per litre and Rs 16 per litre on diesel to shore up its funds amid the pandemic.

The hikes in taxes have led to customers in Delhi paying about 35 per cent extra for petrol and about 32 per cent extra for diesel because the starting of 2020, despite the fact that the worth of crude oil has risen solely about 11 per cent in the identical interval.
Currently, the nation has about 65,000 shops for advertising and marketing of gas, of which about 89 per cent are operated by three main state-owned oil advertising and marketing firms, Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd.