Three days after the Government’s decision to allow the State-run oil marketing companies to distribute dealerships for 55,649 new petrol pumps across the country, the All India Petrol Dealers Association (AIPDA) said on Wednesday that the dealers would move the court against the Centre’s latest move.
Expressing his strong disapproval about the Centre’s latest move which went against its petrol distribution policy, AIPDA President Ajay Bansal said that the aggrieved petrol pump dealers would contest the Government’s decision to allow distribution of 55,649 new petrol pumps across the country.
“While on one hand, a Union Minister announces that the Government would close down all petrol pumps in the country and replace them with alternative fuel outlets by 2025, while on the other the Petroleum Ministry and oil companies publish advertisements seeking bids for the dealerships of 55,849 new petrol pumps second string of new petrol pumps. The Centre’s decision to allow State-run oil marketing companies to distribute dealerships for 55,649 new petrol pumps across the country is contrary to its own policy,” Bansal said.
The Centre had on Saturday allowed the State-run oil marketing companies (OMCs) to go for a massive expansion by doubling the number of fuel outlets over the next five years — a decision that the State-run oil marketing PSUs — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — to invite collectively bids for 55,649 petrol pumps dealership across the country. The Government had said that an independent agency would carry out the bidding process for petrol pump dealerships.
Currently, the three State-run oil marketing companies have 56,000 retail outlets (petrol pumps), while 6,000 outlets are owned by private companies. The average monthly sales of these outlets are 120 to 130 kilograms (1000 litres = 1 kilo litres).
“There is a disturbing fact that approximately 80% of the total retail outlets are under sales. A committee set up by the government itself, which can get profit after selling 170 kgs of any month in any retail outlet, has declared in its report. Because of the limited sale standards, 80% of the dealers are losing financially. The debt burden of the bank is increasing every year, Because of this a large number of dealers are willing to opt out of this business,” Bansal said.
“But there is no provision to get out of this business according to the prevailing rules. If the company does not want to do business, the oil companies do not return the possession of the land to the dealer by sending the dealer home,” he said.
“It is not possible to live in this business and the amount of money immersion in the effort to increase sales by making a lump sum for the survival is very large. There is an annual increase of 4% on petrol and diesel demand. However, the government has announced 100% increase in the cost of new pumps,” Bansal added.
In a related development, Federation of All Maharashtra Petrol Dealers Association (FAMPEDA) President Uday Lodh said with the proposed doubling of retail outlets, the average sales volumes of both existing and new dealers would fall, putting them in great peril. “There is already a huge battle going on for adequate margins of the existing dealers,” he said.