You Have To Pay More When Refilling Your Fuel Tank - Here's Why?

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    Effective today consumers will have to shell out more for fuel purchase i.e petrol and diesel as the OMCs have taken a call to increase dealer commission payable to fuel station owners. The President of All India Petroleum Dealers Association told one of the business dailies that the new commission rates shall be applicable with effect from August 1.

     You Have To Pay More When Refilling Your Fuel Tank - Here's Why?

    The dealer commission has a direct bearing on the fuel price. For petrol and diesel it is Rs. 2.55/litre and Rs. 1.65/litre respectively. The petroleum dealers association has been demanding a surge in commission by Rs. 1 and Rs. 0.72 per litre for petrol and diesel respectively. Dealers claim that commission currently is too low and fails to cover expenses and hence realise profit.

    Since June 16, when the daily revision in fuel price was implemented on a nationwide basis, the petroleum dealer association has been threatening to go on strike on the back of margin reduction as they confront inventory losses whenever crude price and then retail price of fuel goes down. Earlier the fuel price was revised on a fortnight basis but now the daily price change in fuel price is effected at 6 am everyday in line with the international practice.

    "We had requested to increase expenses earmarked under each of these components which translates to a little over Rs 1 per litre for petrol and around 72 paise for diesel," said Bansal.

    Also on a monthly basis taking into the average sales figure of a fuel pump, the profit per month to the dealer comes at around Rs. 25000. This is arrived at after adjusting for operational costs that includes wage figure, electricity payment and also takes into account fuel evaporation as well as return on capital.

    Consumers are known to benefit from this daily price revision or dynamic pricing model.

    Story first published: Tuesday, August 1, 2017, 10:19 [IST]
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