Never buying fuel from OMCs: Petrol pumps

  • May 31, 2022, 11:11 a.m.

NEW DELHI : Around 70,000 petrol pumps across 24 states in the country will not purchase petrol and diesel from oil marketing companies (OMC) on Tuesday, 31 May in protest of no revision in the their commissions despite rise in petrol and diesel prices.

The protests have been scaled by a group of state petrol dealers‘ associations. During a press conference here on Monday, Anurag Jain, President of Delhi Petrol Dealers Association said that the move is unlikely to impact retail supplies to consumers as pumps usually have stock for two days and the pumps will continue to sell fuel on Tuesday.

The states where pumps would hold the protests and refrain from purchase of fuels are Tamil Nadu, Karnataka, Kerala, Telangana, Andhra Pradesh, Delhi, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Himachal Pradesh, Bihar, Assam, Meghalaya, Arunachal Pradesh, Mizoram, Nagaland, Manipur, Tripura, Sikkim. North Bengal Dealers Association and dealers in parts of Uttar Pradesh and Madhya Pradesh have also committed to join the protests.In the national capital about 400 petrol pumps would not purchase fuel on Tuesday, while 6,500 pumps would join the protests in Maharashtra.

According to the dealer associations, although there was an agreement between OMCs and dealer associations that the dealer margins will be revised every six months, it has not been revised since 2017. “The prices of fuel have almost doubled since 2017, hence the working capital in business has doubled leading to additional loans & bank interests thereupon," said a statement.

“Evaporation losses have increased proportionately. Also, the overhead expenses like bank charges, electricity bills, salaries etc have increased manifold during the last 5 years. Our constant demand to revise dealer commission has been overlooked by the OMCs. By doing so OMCs are making its own network financially unviable," it said.

Currently, petrol pumps get a commission of around ₹2.90 per litre of petrol and around ₹1.85 per litre in the case of diesel.

Jain said that although commissions were increased by around Re 1 a litre in 2017, “OMCs keep 40 paise of it in the name of licence fees."

The petrol dealers also have sought reimbursement of their losses on account of the recent reduction of excise duty on petrol and diesel.

“Dealer associations welcome the relief given to citizens of the country by the central government in reducing prices of petrol and diesel. However, these sudden cuts have led to huge financial loss to the dealers. Central government in the past six months have announced two major cuts in excise duty (on Novemer 4, 2021 and May 21, 2022), and the entire burden of ₹13/litre on petrol and ₹16/litre on diesel was passed on to the petrol pump dealers causing huge irrecoverable losses," the statement said.

According to petrol pump associations, pumps across the country lost about ₹2,100 crore after the latest duty cut as they had procured the fuel at higher duty and had to sell the fuel at lower prices due to the reduction in excise duty.

On 22 May, the Centre reduced the central excise duty on petrol by ₹8 per litre and on diesel by ₹6 a litre. Consequently, the retail price of petrol in Delhi came down to ₹96.72 a litre and diesel to ₹89.62 per litre.

The call for protests comes just days after another dealers’ body, All India Petroleum Dealers Association (AIPDA), said that petrol pumps would not resort to any protests as officials at the ministry of petroleum and natural gas have assured to address their issues.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

Related News