Oil Companies Raise Dealer Commission for Petrol and Diesel Without Changing Retail Prices

State-owned fuel companies have increased the commission for petrol dealers by 65 paise per litre and for diesel by 44 paise per litre. This adjustment does not affect the retail prices of these fuels. Additionally, intra-state freight charges have been rationalised, leading to reduced petrol and diesel prices in regions like Odisha, Chhattisgarh, and Himachal Pradesh. This marks the first change in dealer commissions in nearly eight years.

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Dealer Commission and Freight Rationalisation

Indian Oil Corporation (IOC) announced that the new dealer margins are effective from 30th October 2024. This decision follows the resolution of a legal dispute. The current commission for petrol is Rs 1,868.14 per kilolitre plus 0.875% of the billable price, while for diesel, it is Rs 1,389.35 per kilolitre plus 0.28% of the billable price. The increase will add Rs 0.65 per litre for petrol and Rs 0.44 per litre for diesel.

IOC stated that this revision aims to improve customer service standards and enhance staff welfare at retail outlets. The company also emphasised its commitment to providing affordable fuel nationwide by rationalising intra-state freight charges. This move will reduce price variations within states, except where the Model Code of Conduct applies.

Impact on Fuel Prices

Oil Minister Hardeep Singh Puri praised the freight rationalisation, noting it will benefit consumers in remote areas far from fuel depots. This change will lead to lower petrol and diesel prices in several regions across India. For instance, in Odisha's Malkangiri district, petrol prices will drop by Rs 4.69 in Kunanpally and Rs 4.55 in Kalimela, while diesel prices will decrease by Rs 4.45 and Rs 4.32, respectively.

Similarly, Chhattisgarh's Sukma district will see a reduction of Rs 2.09 in petrol prices and Rs 2.02 in diesel prices. Other areas like Bijapur, Bailadila, Kateykalyan, Bacheli, and Dantewada will also experience price cuts. Price reductions are expected in parts of Arunachal Pradesh, Himachal Pradesh, Uttarakhand, and Mizoram as well.

Benefits for Dealers and Consumers

The increased dealer commission is expected to improve services for around seven crore customers visiting fuel outlets daily without raising fuel prices. This long-awaited change brings relief to petrol pump dealers and nearly ten lakh staff working at over 83,000 outlets nationwide.

Ajay Bansla, President of the All India Petroleum Dealers Association, welcomed the decision as it helps offset rising operational costs over the past eight years. He noted that this revision comes after seven years and eight months and mentioned that dealers have withdrawn a legal case against oil companies regarding marketing discipline guidelines.

The adjustment in dealer commissions follows the withdrawal of court cases by dealers against oil companies.