When oil marketing companies are claiming under-recoveries running into crores of rupees, the petroleum dealers association on Tuesday questioned the companies' ability to incur the expenditure of setting up 3,000 petrol stations across the State.
Dakshina Kannada and Udupi District Petroleum Dealers' Association member Satish N. Kamath told presspersons that oil marketing companies were proposing to set up 3,000 new petrol stations across the State, each of which would require an investment of at least Rs. 50 lakh.
Around 40 per cent of the existing 300 dealers in the two districts were incurring loss as their sales did not cross 150 kilo litres a month while they needed sales of at least over 200 kilo litres a month to stay afloat. Another cause for concern was the cost of additional services provided by petroleum dealers such as toilets, windshield cleaning, and air filling.
High taxes in Karnataka had adversely affected dealers in the State.
Many dealerships in the border areas of Karnataka had to close down because people would fill their vehicles either in Kerala where petrol was cheaper by Rs. 4 or to Goa or Maharashtra where the difference was similar, Mr. Kamath said.
While the margins of petrol dealers had remained the same, other costs had gone up, making it difficult for the dealers to survive.
Mr. Kamath wondered how the oil marketing companies could claim losses worth crores of rupees and still planned for setting up new dealerships across the State. To discuss these issues, the association had organised a conference to be held in Kundapura on November 26 and 27.
Oscar Fernandes, MP, and Shobha Karandlaje, Minister for Energy, were likely to attend the inauguration, he said.
Keywords: petrol station