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Court directs OMCs not to open new outlets

Court directs OMCs not to open new outlets

Karnataka high court directed all state-run oil marketing companies (OMCs) not to open new retail outlets till it completes the hearing of a petition filed by an dealers association.

The Karnataka State Petroleum Dealers Welfare Association filed a petition with the court after OMCs kept calling for dealership.

OMCs are attempting to expand dealership despite the oil ministry’s December 3, 2012 order that no retail outlets should be announced or set up till such time the ministry arrives at a policy and parameters based on volume, distance and other norms.

OMCs are allegedly inviting applications from prospective dealers by painting a rosy picture about the profits. Members of Dakshina Kannada and Udupi Petroleum Dealers Association alleged this.

Following the court directive, the three state-run OMCs – IOC, BPCL and HP — would not open new retail outlets till the petition is disposed of.

Union petroleum ministry earlier asked OMCs not to invest in opening new retail outlets and said the investment is to be made by prospective dealers only. OMCs may specify suitable standards of service or safety of retail outlets and make them operational through a suitable retail outlet scheme and all future outlets should be automated, a letter from the ministry to OMCs said.

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