The Karnataka State Federation of Petroleum Dealers (KSFPD) has said that ‘one nation one price’ for petroleum products can be implemented with uniform VAT on petroleum products across the country.
A delegation of KSFPD, which met the Union Petroleum Minister Hardeep S Puri, in New Delhi on Thursday, discussed several points that are concerning the petroleum dealers.
Vishwas Shenoy, Vice-President of KSFPD, who was part of the delegation, said that ‘one nation one price’ for petroleum products has been the demand of dealers for long. The introduction of GST could have helped in implementing it. “We do understand the difficult situation of the Central government, which is dependent on the States for enforcing GST on fuel, and the reservations submitted by the State governments in this regard,” he said, adding, “we feel that ‘one nation one price’ can still be enforced with uniform VAT across the country.”
He said an initiative in this regard will help dealers.
The federation also brought the issue of pending revision of commission to the notice of the Minister. The revision of commission to petroleum dealers has not been addressed since August 2017.
He said it was decided to periodically consider the various factors contributing to the retail selling price such as throughput per outlet, electricity, salary, bank charges, working capital, etc., in a meeting held with the top managements of all the three oil marketing companies (OMCs) on November 4, 2016. The Minister has been requested to look into the matter on priority as the financial health of the dealers is at stake, he said.
On the reduction in excise and VAT early in November, he said this reduction resulted in heavy losses to the dealers.
With November 1 and 3 being public holidays in Karnataka, the sale volumes were below average. He said the huge stocks that were dumped by the OMCs over October-end remained unsold on the evening of November 3 when there was a largest ever reduction in the prices of petroleum products.
Shenoy said the delegation requested the Minister to advise the OMCs to compensate the losses incurred on the stocks as on the morning of November 4.
Shenoy said the sale of spurious automotive fuel in the name of biodiesel has troubled operations in petroleum retail. Stating that a majority of the fuel sold in the name of biodiesel is spurious automotive fuel derived from various unknown sources, he said though the Karnataka government did act upon the request of the KSFPD to control this, this fuel is being manufactured and transported from Gujarat. Surprisingly the sale of biodiesel has been banned by the Gujarat government, he said, adding that the federation sought favourable action to sort out the issue.
He said the mushrooming of new outlets have drastically affected the throughput per outlet and many rural outlets are on the verge of closure or operating under losses owing to poor volumes. An option of de-leasing where the land is leased to the OMCs and an exit policy for those dealers who feel that the trade is not viable should be introduced. Such a move will help such dealers to diversify, he said.