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Govt allows direct sale of bio-diesel by manufacturers

19 Jan 2015 Evaluate

In an attempt to ease the sourcing of bio-diesel, the Centre on Friday has allowed private bio-diesel manufacturers to sell directly to consumers like Indian Railways. Prior to this, only state-run oil firms and private companies with infrastructure investments of Rs 2,000 crore were allowed to market petrol, diesel or bio-diesel.

However, the Union Cabinet, chaired by Prime Minister Narendra Modi, gave its approval for amending the Motor Spirit (petrol) and High Speed Diesel (diesel) control order for Regulation of Supply, Distribution and Prevention of Malpractices dated December 19, 2005.

This amendment, which would relax Rs 2000 crore investment clause, would allow private bio-diesel manufacturers, their authorized dealers and joint ventures of oil marketing companies (OMCs) authorized by the Ministry of Petroleum & Natural Gas (MoP &NG) as “dealers” and would also allow them the marketing /distribution functions for the limited purpose of supply of bio-diesel to consumers.

Notably, the amendment comes against the backdrop of problems faced in sourcing and financial difficulties faced by State-run companies. With this development, bulk users, such as the Indian Railways, can now source the fuel directly.

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