BP granted licence to operate petrol pumps in India

With the Indian government granting formal licence for marketing auto fuels in the country, British Petroleum (BP) will soon be setting up petrol pumps nationwide.

The government on Friday granted a licence to BP, Europe's third-largest oil company, to operate 3,500 petrol pumps in the country. BP Plc has thus become the tenth company to enter India's auto fuel market.

"BP granted licence to market Motor Spirit (petrol) and High Speed Diesel (diesel) – another milestone for BP in India," the company tweeted.

Beside BP, the government also approved an application by Haldia Petrochemicals Ltd for starting retail business of petrol and diesel, sources said.

"A significant step in #BP's partnership with India – been granted licence to market Motor Spirit and High Speed Diesel," it said.

BP, which suffered a big setback in exploration activities with the Gulf of Mexico rig accident, is looking at the safer option of downstream operations and India looks a fertile ground for oil transportation and marketing.

The company had in January this year won in-principle approval to retail aviation turbine fuel (ATF) to airlines in India. Subsequently, it got full approval for that.

Now, with permission to market auto fuels – petrol, diesel and ATF – the company is looking for another long haul.

To obtain a fuel marketing licence a company should have invested a minimum of Rs2,000 crore in exploration or production of oil and gas, oil refining, gas or product pipeline or terminals leading to creation of new assets in the eligible activities.

BP, which had in 2011 bought 30 per cent interest in 21 exploration blocks of Reliance Industries for $7.2 billion, had cited investment of nearly $500 million in oil and gas exploration and production for gaining the licence.

India currently has about 56,190 petrol pumps, with public sector firms operating a majority of them.

Private sector operators are limited to Essar Oil and Reliance Industries, who between them have some 3,500 petrol pumps. Royal Dutch Shell operates 82 petrol stations.

Numaligarh Refineries Ltd (NRL) and Mangalore Refineries and Petrochemicals Ltd (MRPL) are late entrants and have six outlets between them.

State-owned Indian Oil Corp (IOC) owns 25,363 petrol pumps, Hindustan Petroleum Corp Ltd (HPCL) 13,802 stations and Bharat Petroleum Corp Ltd (BPCL) 13,439 outlets.

Kolkata-based Haldia Petrochemicals Ltd (HPL) was the latest company to get licence to set up upto 100 petrol pumps, mostly in West Bengal.

There are 205 aviation fuel stations in India, 100 of which are owned by IOC, 40 by BPCL and 37 by HPCL. RIL has 27 aviation fuel stations at airports while joint venture of Shell and MRPL owns one.

BP has been present in India's oil and lubricants sector for over 100 years and currently employs around 8,500 people in the oil, gas, lubricants and petrochemicals businesses.

In addition to its gas value chain alliance with Reliance Industries Ltd, BP's activities include Castrol lubricants; the licensing of competitive petrochemical technologies; oil and gas trading; IT, procurement and financial services for global operations; staffing and training for its global marine fleet; and the recruitment of skilled Indian employees for its global businesses.