In the CBD, it is hard to find a petrol station

A multi-storey building is coming up on this site, which used to house a petrol station.— Photo: K. Murali Kumar

A multi-storey building is coming up on this site, which used to house a petrol station.— Photo: K. Murali Kumar  

Landlords are terminating the lease as rent increase has not kept pace with market rate

In the Central Business District (CBD), malls, ATMs, restaurants, shopping complexes can be found within a few meters of each other. However, for a motorist to find a fuel station is akin to finding a needle in a haystack.

Over the past two years, sky-rocketing land prices and lapsed leases have resulted in closure of at least 20 petrol stations. Many others are on the verge of closing — pulling along by contesting in court the eviction order of landowners. Ironically, the trend of petrol stations disappearing comes at a time when the number of vehicles in the city has exceeded 65 lakh.

“I would not be surprised if in a few years, a motorist would have to go to Tumakuru Road to fill fuel. Older petrol stations are closing down as landowners do not want to renew the lease. No one wants to give land to petrol stations when they can make much more through a commercial complex,” said Sq. Ldr G.V. Bhushan Narang (retd.), chairman of the Petroleum Dealers' Association.

While two decades ago, there were 11 petrol stations on M.G. Road when it was one of the few thoroughfares in the city. The number has dwindled to two, he says.

In the past year or so, fuel stations at Shivajinagar, on St. Marks Road, Shivananda Circle and Palace Road have closed down after the leases expired.

At Hudson Circle and Jayamahal Road, stations have been razed. A ‘landmark’ petrol station on Residency Road, another at the corner of Brigade Road and one on M.G. Road are hanging on due to long-drawn court cases.

This is not to say that the number of petrol stations is declining. The city has nearly 550 fuel stations. This number is bound to increase due to demand in high-growth peripheral areas . However, in the CBD, dealers say many more stations will close down.

“This is just bad planning. When oil companies took the place nearly 30 years ago, they were paying a rent of Rs. 2,000 per month. Over time, the the amount has increased but is not even close to the market rate,” said B.R. Ravindranath, president of the Bangalore Petrol Owners Association.

A lease for a fuel station comes with a lock-in period, typically between 15 and 20 years. Over such a long period, the rent can increase by a substantial amount in a fast-growing city like Bengaluru. At the intersection of Cunningham Road and Palace Road, a decades-old petrol station had to close down a year ago. “We were paying around Rs. 50,000 in rent, which is a pittance for this location. The landowner waited for the lease agreement to expire before asking us to vacate,” said the former manager.

An official from Hindustan Petroleum Corporation Limited (HPCL) said closures ‘remained a concern’, but there do not have a solution. “We saw this decline in petrol stations in high land value areas of Mumbai too. As far as possible, we try to reason with landowners, and in a few cases convinced them to renew the lease,” he said.

Why you should pay for quality journalism - Click to know more

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Mar 30, 2020 1:10:14 PM |

Next Story