Dealers worried over losses as daily price revision of fuel kicks in

Daily revision of petroleum prices from June 16 has resulted in a loss of around ₹30,000 till date (June 19) for the dealers selling the fuel.

President of the All India Petroleum Dealers Association, Ajay Bansal, said: “Pump owners have lost around ₹30,000 from each outlet in the four days the daily revision has been implemented. The worst affected are the small pump owners, as it is difficult to protect the dealer margins.”

The retail price of petrol has come down by 83 paisa from ₹65.48 a litre on June 16 to ₹64.65 a litre on June 19 at Delhi, in the four revisions made till now. Diesel price has come down by 48 paisa from ₹54.49 a litre on June 16 to ₹54.01 a litre on June 19.

Bansal told

BuinessLine that retail outlets that sell less than 2,000 kilo litre a day are the most affected as they are forced to procure no less that 12,000 kilo litre of fuel in one go. “So they are selling fuel at a lower price than they had procured,” Bansal said adding that the Association will hold a meeting on June 28 to review the implementation of the daily price revision by its members.

The current dealer margin on petrol stands at ₹2.16 a litre and on diesel at ₹1.60 a litre. Sources say that dealers have sought an increase in their fuel margins to mitigate the loss. They have proposed a hike in the margin on petrol to ₹3.21 a litre and diesel to ₹1.92 a litre.

Another concern for the dealers is the retail outlets are not equipped to automatically update petrol and diesel prices. Bansal said, “Since the revision is being done at 6:00 am every morning, dealers have to either come every morning at around 4:00 am or assign someone to implement the new price manually at all the retail outlets. Less than 10 per cent of all outlets in the country can automatically change the prices.”

The nationwide daily price revision of petrol and diesel is an extension of the pilot project that was implemented by the government-controlled oil companies in the cities of Udaipur, Visakhapatnam, Jamshedpur, Puducherry and Chandigarh.

Meanwhile, private players in the segment remain more or less unaffected. Both Essar Oil and Reliance Industries said that all their fuel outlets are automated and that they are changing the fuel price every day in line with the international prices of the products.

Consumers unfazed

Consumers, on the other hand, are unfazed by the daily revision. A transporter told BusinessLine , diesel costs account for only 20 per cent of the cost for a vehicle owner in last mile (rest is fixed), so even a daily fluctuation of 1-2 per cent in diesel price will not have any material impact on the overall cost.