India’s retail fuel race attracts global attention: Fuel for Thought

The number of global oil majors weighing options to invest in India’s retail fuel space is impressive as pricing deregulation allows private firms to compete with state companies. Since the BJP-led government came to power in 2014, New Delhi has taken some concrete steps to align domestic fuel pricing with market forces. One of the most significant reforms undertaken by the government was the deregulation of diesel—unshackling a decades-old subsidy regime—that has created a level-playing field for private companies. The diesel market’s deregulation came four years after gasoline prices were deregulated in 2010. As a result, fuel marketing in India has become a profitable business. Couple deregulation with one of the strongest pockets of global oil demand growth and it’s easy to see why several foreign majors have set their sights on India. India’s oil product consumption growth is expected to outpace China’s for a third year in a row. Indian oil product demand is likely to grow 7% to 4.13 million b/d in 2017, whereas China’s oil demand is expected to rise only 3% to 11.5 million b/d in the same period, according to Platts Analytics. Royal Dutch Shell was the first overseas oil company to venture into the

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