Oil Marketing Companies (OMCs) in the private sector have welcomed the decision of the government to allow state-run OMCs to revise diesel prices.
However, they want complete de-regulation of diesel pricing in the country. They feel that the decision to allow state-run OMCs to revise diesel price is a token measure. Private fuel retailers feel that the government would not allow state-run OMCs to effect huge price hike especially in election year.
Private fuel retailers like Reliance Industries (RIL), Shell, Essar Oil have set up retail outlets but they are unable to sell diesel at market rate because state-run OMCs are selling the same product at subsidised rate. Therefore, many of the retail outlets of these private firms are lying idle.
For example, Essar Oil, which has around 1,406 retail outlets, has only 1,200 retail outlets operational. But with the government allowing state-run OMCs to revise diesel prices, Essar may open its other 200-odd outlets.
LK Gupta, Managing Director and CEO of Essar Oil feels the need of complete deregulation of fuel prices and urges the government to allow market forces to set the benchmarks in tandem with global oil prices.
It may be noted that private fuel retailers form less than 10 per cent of India’s fuel retail business. Government-owned companies - Indian Oil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation - dominate the fuel retail business, with more than 90 per cent share.