The Consortium of Indian Petroleum Dealers (CIPD), a body representing over 65,000 retail fuel outlets in the country, has urged the Centre to increase dealer margins. The last revision was in August 2017 and more than five years have passed since then, said K. Suresh Kumar, CIPD Honorary General Secretary.
The CIPD has written to the Union Minister for Petroleum and Natural Gas Hardeep Singh Puri urging him to implement an agreement signed in November 2016 between the dealer associations and the three public sector undertaking oil marketing companies (OMCs).
“In the meeting held in Mumbai it was agreed to revise dealer margins based on All India Consumer Price Index and operating cost, every six months. But that agreement has been kept on hold,” Mr. Suresh said.
The cost of operations, including salaries, interest on loans, electricity charges, imposition of various costs by OMCs like E- locking, automation network, point of sale machine (debit/credit card swiping machine), and many times, the dumping of branded fuels and lubricants with low offtake has made dealers struggle to sustain their operations.
A dealer in the city said that around 75% of dealers across the country were those who ran outlets that witnessed low sales volumes. “They are struggling to break even and barely managing to keep their outlets running. There have been two reductions of excise duty since our margins were revised. And on both occasions, dealers suffered heavy losses,” he said.
Dealers, who were hit badly during the pandemic, were also being put to hardship due to commissioning of new retail outlets that are capturing businesses to survive. The Apoorva Chandra Committee had also suggested that dealer margins be revised on a regular basis.
“With fuel prices touching all time highs, many dealers have had to borrow heavily to purchase fuel even. Outlets that have been in the business for many years are folding up due to competition and mounting losses. The Minister must step in to save the industry,” said the dealer.
