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India to soon grant BP license to operate 3,500 fuel retail outlets

Declining GDP growth in China has renewed interest in India, the second largest market in Asia for petroleum products. BPโ€™s lubricants arm, Castrol India Limited, has long been a major player in the Indian lubricant market. But the fuel retail segment is a different story, as this is dominated by public sector undertakings (PSUs). Although there are currently 56,000 oil retail outlets in India, just 6.25% of these are operated by the private sector.

“BP sees a strong future for transportation fuels in India. We are keen to be involved in this market and contribute to its development,โ€ a BP spokesperson told the Business Standard.

BP, which has upstream investments in India, confirmed that it has decided to join the likes of Reliance Industries Ltd., Essar Oil and Shell. Together, these private firms operate 3,500 oil retail outlets.

The BP spokesperson confirmed that after many years of waiting, it has received approval to market aviation turbine fuels (ATF) in India, and has โ€œadditionally applied for an authorisation to market MS (petrol) and HSD (diesel).”

According to Indian policy, a retail licence can only be granted to companies which have invested more than INR2,000 crores (USD302 million) in exploration and production (E&P), refining, pipelines or terminals. BP has a 30% interest in RILโ€™s exploration blocks worth billions of dollars.

An oil ministry official confirmed with Reuters that BP will be officially notified soon that it has been granted permission to operate 3,500 retail outlets in India.

India’s oil consumption is seen rising by 6 million barrels per day (bpd) to about 10 million bpd by 2040, according to the International Energy Agency.

India’s fuel demand rose by 11.6% in 2015-16, the highest growth rate posted in the last 16 years.