In a bid to ease the sourcing of bio-diesel, the Cabinet on Friday allowed private manufacturers of the alternative fuel to sell it directly to consumers like Indian Railways.

Currently, only state-owned oil firms and only those private firms investing Rs 2,000 crore in oil infrastructure were allowed to retail petrol and diesel. Bio-diesel, which is to be doped in diesel before being used to fuel automobiles, too was clubbed under this rule.

“The Union Cabinet chaired by PM Narendra Modi gave its approval for amending the motor spirit (petrol) and high speed diesel control order for regulation of supply, distribution and prevention of malpractices dated December 19, 2005,” an official statement said.

“The amendment will allow private bio-diesel manufacturers, their authorised dealers and joint ventures of oil marketing companies authorised by the ministry of petroleum & natural gas as dealers and give marketing /distribution functions to them for the limited purpose of supply of bio-diesel to consumers,” it said.

The amendment was made because users faced problems in sourcing bio-diesel. State-owned firms had their consideration because bio-diesel cost was more than refinery-gate price of diesel. With the relaxation, bulk users like Railways can buy bio-diesel directly from manufacturers and dope in diesel for running locomotives.