Shell India Pvt Ltd (SIPL) had not been granted licence to sell petrol and diesel in the country, the government said on Thursday.

"No marketing rights for sale of transportation fuels have so far been granted to SIPL by government," Minister of State for Petroleum & Natural Gas Sumitra Mahajan informed Lok Sabha.

SIPL, she said in a written reply, had submitted a proposal to the government for setting up a wholly owned subsidiary company in India to market transportation fuels.

"However, SIPL has not completed an investment of Rs 2,000 crore (Rs 20 billion) in eligible activities for grant of authorisation, nor furnished a bank guarantee of Rs 500 crore (Rs 5 billion) as per extant guidelines in the matter," she said.

A licence to retail petrol and diesel is contingent upon a company investing or proposing to invest Rs 2,000 crore in oil infrastructure activities like exploration and production, refineries, pipelines and terminals. Companies proposing to invest Rs 2,000 crore are required to furnish a bank guarantee of Rs 500 crore to get the rights.

Shell had applied for setting up 2,000 petrol stations across the country. It banked on its under-construction 2.5 million tonnes LNG import and regassification terminal at Hazira in Gujarat for meeting the entry condition.

Earlier this week, Shell India chairman Vikram S Mehta had said the company would cross the Rs 2,000 crore investment threshold by early 2004 and it plans to set up the first petrol station in the country in second half of 2004. The LNG terminal, costing around Rs 2,500 crore (Rs 25 billion), is slated for commissioning in December 2004.