New Delhi: Government has lifted the ban on setting up of petrol pumps and LPG agencies by allowing state-run oil firms to appoint dealers on their own.

Ministry of Petroleum & Natural Gas has done away with the Dealer Selection Boards (DSBs), that selected dealers previously, and instead has authorised oil public sector undertakings (PSUs) - IOC-IBP, BPCL and HPCL - to appoint their own dealers, official sources said.

"Broad rules for selection of dealers has been laid out," they said.

Government had put a ban on setting up of petrol pumps and LPG agencies in the aftermath of the controversy over alleged nepotism in dealer selection.

Unlike private firms like Reliance Industries, Essar Oil and Shell India which are compelled to set up 11.6 per cent of the outlets in remote and low service areas, the state-run oil marketing companies (OMC) have to reserve 50 per cent of their dealership for weaker sections.

While 25 per cent of the new petrol stations and gas agencies to be set up would be reserved for SC/ST, 10 per cent slots would be kept for Other Backward Classes. Paramilitary and Defence personnel will get 4 per cent each of the new petrol stations and gas agencies to be set up.

Two per cent dealerships have been reserved for physically handicapped and another 3 per cent for freedom fighters, they said.

As per the new norms, the OMCs will set up their own three-member panels to select dealers for new locations and those which were advertised by the erstwhile dealer selection boards but for which interviews were not held.

PTI