The Indian government has lifted the ban on setting up of petrol pumps and cooking gas agencies by allowing state-run oil firms to appoint dealers on their own.

The petroleum ministry has done away with Dealer Selection Boards, that selected dealers previously, and instead has authorised public sector oil companies -- IOC, IBP, BPCL and HPCL -- to appoint their own dealers, official sources said.

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

Also Read The Petrol Pump Row

The government had put a ban on setting up of petrol pumps and liquefied petroleum gas 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 have to reserve 50 per cent of their dealership for the 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.