On a day when state-run oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) launched the daily revision of fuel prices, at least 1000 petrol pumps across seven districts in Karnataka have shut shop protesting against the move.
This comes after fuel dealer associations called off their plan to go for “no purchase” of fuel following intervention from Petroleum Minister Dharmendra Pradhan. “The move will wipe out the entire margins of marginal dealers. While oil marketing companies claim that 95 per cent of retail outlets are automated, only 5 per cent are automated. At least 1000 petrol pumps are shut down in seven districts of Karnataka with no purchase and no sale, while some outlets in Bangalore too have opted to go for no purchase,” said Ranjith Hegde, secretary of Mysore Petroleum Traders Association.
All the major associations had called off their strike after the government assured an increase in dealer commission from July. When asked about this, a senior official from IOC told Business Standard, “The rollout of daily pricing was done smoothly and there is no disruption reported so far.” Pradhan had assured the dealers that the automation of petrol pumps will happen as soon as possible and a committee is set to submit a report on this within a month.
“We have gone ahead with the daily pricing system and for small dealers, who sell in the range of 200-kilo litres, this move will wipe out margins. We are waiting for 15 days to see the results and then take a call on future action,” said B T Ram Kumar, joint secretary of the Consortium of India Petroleum Dealers (CIPD). A stringent fine of Rs 5 lakh and suspension of sales and supplies for 60 days have been implemented in the amended guidelines for not operating the petrol pump in the automation mode, or making automation dysfunctional, said a dealer from Delhi dealers association.
Before taking the decision of daily revision nationally, PSU oil companies conducted a 40-day pilot run in five cities, including Chandigarh, Jamshedpur, Puducherry, Udaipur, and Vishakhapatnam. Out of the total 59,595 fuel retail outlets in the country, close to 54,000 outlets are under by state-run companies like IOC, HPCL and BPCL. According to dealers, only 10,000 outlets in the country are automated now.
