Petrol dealers to meet Petroleum Minister on losses after excise duty cut

Rishi Ranjan Kala | | Updated on: May 23, 2022
The dealers are working on wafer thin margin

The dealers are working on wafer thin margin | Photo Credit: SUSHIL KUMAR VERMA

AIPDA plans to hold protests from next week if the government does not meet their demands

The All India Petroleum Dealers Association (AIPDA) will meet with Petroleum and Natural Gas Minister HS Puri on Thursday over the losses to the tune of ₹2,100 crore post the reduction in excise duty by the Centre.

Several other State dealer associations are also planning to hold protests this week on the issue. Dealer associations in Madhya Pradesh (MP), Lower Assam, and West Bengal, among others, are planning to hold protests on reimbursement of higher excise duty and other pressing issues.

“Pump operators pay for auto fuel in advance and are charged the higher excise duty prevailing at that time. The reduction last Saturday in duty has impacted dealers, and at all India level, the losses are around ₹2,100 crore,” AIPDA Vice-President Ajay Singh told the  BusinessLine.

Nationwide strike

On Saturday, the Centre slashed Central Excise Duty on petrol by ₹8 per litre and on diesel by ₹6 a litre. After the reduction, the retail price of petrol in Delhi came down to ₹96.72 a litre and diesel to ₹89.62.

Singh said that the association will be meeting Puri on May 26 and will place their grievances before him.

“We will urge the Minister to grant a reimbursement on the higher amount paid by dealers. There are a couple of other issues too, like dealer commission and forcing dealers to sell lube (oil). If the government does not meet our demands, then we will hold a nation wide strike next week, “Singh added.

Dealer margin

Another office bearer from a State petroleum dealers’ association said that dealers are working on wafer thin margins. The last revision happened five years ago. In August 2017, the dealer margins were last revised.

“If we calculate margins as a percentage of the then (2017) prevailing retail prices, then our commission works out at around 3.40 per cent on diesel and 4.40 per cent on petrol. At current prices, the commission is now 2.10 per cent on diesel and 3 per cent for petrol. We too have compliance, wages, and operating costs. The commission should be at least 5 per cent. How do you expect us to continue doing business?,” he added.

The MP Petroleum Dealers Association on Thursday, in a letter to the state level coordinator (for oil marketing companies), raised similar issues.

“MPPDA has raised the issue of OMCs forcing dealers to sell lubricants (Lube). Companies without any demand or indent are being served lube bills of as much as ₹5 lakh. They are forcing dealers to sell lubes. This practice should stop. The association has told the SLC that if their demands are not met, the association will hold protests on May 25,” said a dealer who is a member of the association.

Sources also said that 14 State petrol dealer associations, including from Delhi, will meet on Tuesday to deliberate on the next course of action over the issues of reimbursement on excise duty, forceful sale of lubes by OMCs and dealer commission.

Published on May 23, 2022
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