Just over a week after dynamic pricing of petrol and diesel started, the prices have gone down the hill all the way for the consumer. Though the reduction in prices has been in paise, it is now over ₹3 for petrol and over ₹2 for diesel.
“As a customer any reduction in prices is a happy thing for me. But this continuous fall does not convince me that this would be the trend throughout; there would be increases too. And seeing the past trends I know that when increases happen they happen in rupees and not paise,” said R. Srikantan, a resident of Mylapore.
Velachery resident M. Manikantan, who commutes by a two-wheeler every day to Manapakkam, said he was happy with the price drop and said consumers who use more fuel will get bigger benefits.
However, he adds, “I hope the prices are not like discounts that some shops offer — hiking them to only offer a reduction. Also to my knowledge the commodities market does not function in the weekend, but the prices are going down even on Saturdays and Sundays,” he said.
But happy consumers and oil companies do not mean happy petroleum dealers too.
Many in the State are complaining about the cumulative losses they are facing. Tamil Nadu Petroleum Dealers Association president K.P. Murali said when changes were made once in 15 days dealers were able to keep inventory losses at a minimum.
“When the announcement was made, nobody knew of the ramifications at that time. Trials were conducted in a few cities. I don’t think dealers there were consulted. Dealers, especially those who do low-volume sale, have been complaining about the losses and saying if this goes on for a few more months, they would have to shut shop,” he said.
Gross margin
Tamil Nadu Indian Oil Dealers Association vice-president K. Suresh Kumar said the gross margin for petrol for a litre for a dealer was ₹2.50 and for diesel ₹ 1.60 with which they had to meet all expenses including salaries, electricity bills, repairs and maintenance and taxes.
“Dealers are thinking they might as well go out of stock than hold stock and lose out. When the commodities market does not function on weekends, we wonder how the oil companies are changing prices on such holidays,” he said.
“We have been demanding a hike in margins but no one is listening to us. If this continues, we would have to start borrowing heavily. High volume dealers have lost around ₹1.10 lakh in a week and low volume dealers nearly ₹60,000. How can we bear such losses in the long run,” he asked, adding that oil companies and oil dealers associations will have to take a call.
