Petroleum dealers not to lift fuel products on May 31
PATNA: Petroleum dealers in India will not make any purchase of fuel products on May 31 as a token protest, demanding compensation from oil marketing companies (OMCs) against losses due to cuts in excise duty twice in the last six months, said Prabhat Kumar Singh, president of the Bihar Petroleum Dealers’ Association (BPDA).
Two cuts in excise duty, on November 4, 2021 and May 22,2022, led to heavy losses of the dealers, he claimed.
“If the OMCs do not heed our request, we will shut both sale and purchase of fuel, after which we will chalk out our future action plan,” said Singh, who led a 15-member delegation to the executive director of the Indian Oil Corporation Limited, who is also the state level coordinator of the other OMCs, including the Hindustan Petroleum Corporation Limited and the Bharat Petroleum Corporation Limited, and submitted a memorandum to tis effect on Wednesday. The BPDA is also demanding enhancement in dealer margin. “The price of fuel has almost doubled and so has the investment cost, which also includes mandatory stock a dealer must maintain, but dealer margin has not increased since 2017,” said Singh.
A dealer gets a per litre commission of ₹2.22 on diesel and ₹3.30 on petrol, of which the OMCs deduct licence fee recovery, which includes certain mandatory obligations at a petrol pump.
Stressing on reverting to the fortnightly change in fuel rates, Singh said, “While switching to the daily price mechanism, the intent was to pass on the benefits of fluctuations in the international crude market every day. Dealers were then told that it will insulate them from financial losses due to sudden decrease in the rates. This has not had the desired effect as a fortnightly revision would have had. A fortnightly change in rates will ensure better management of stocks and safeguard dealers against losses, as they will be able to plan their inventory better. ” BPDA general secretary Brijendra Kumar said, “We are also demanding that the price cut in fuel be proportionate to the increase in price, which generally goes up by a few paise per litre.” The cut in central excise duty on May 22 reduced prices on petrol by ₹8.99 per litre and diesel by ₹7.02 per litre, bringing down petrol price to ₹107.24 per litre in Patna as against ₹116.23 a day ago. Similarly, diesel price had dropped to ₹94.04 as against ₹101.06, which was ₹7.02 less than a day ago.
In November last year, the state reduced VAT on petrol by ₹2.06 and ₹2.01 on diesel following the Centre’s decision to slash excise duty by ₹5.83 and ₹11.87 per litre on petrol and diesel, respectively.
Diesel prices in Patna had then reduced from ₹105.07 on November 3 to ₹91.09 per litre on November 5 and petrol prices from ₹113.79 to ₹105.90 per litre during the same period, following reduction in excise duty and VAT.