OMCs Hike Dealer Com­mis­sions

The Economic Times - - Companies: Pursuit Of Profit - Our Bu­reau

New Delhi: State oil com­pa­nies have in­creased the com­mis­sion for petrol pump deal­ers by up to 55% un­der a re­vised for­mula that ac­counts for higher staff wages and, for the first time, the re­turn on in­vest­ment in land used for the fill­ing sta­tion.

“This is a good move by the gov­ern­ment and the oil com­pa­nies. The de­ci­sion will mainly ben­e­fit low-sell­ing re­tail out­lets, many of which were run­ning on losses,” said Ajay Bansal, pres­i­dent of the All In­dia Petroleum Deal­ers’ As­so­ci­a­tion.

In­dian Oil Corp. de­clined to com­ment for the story. Bansal said the com­mis­sion hike is with ef­fect from Au­gust 1. It wasn’t clear if fuel prices re­flected the in­creased com­mis­sion.

The re­vi­sion in­volves a com­plex for­mula, al­lo­cat­ing a higher com­mis­sion per litre to lower-sell­ing out­lets, Bansal said. It has for the first time fac­tored in the re­turn on in­vest­ment in land owned by deal­ers, he added. For sell­ing 170 kilo­litres of fuel, a dealer will now earn an ad­di­tional com­mis­sion of 63 paise a litre. If the dealer also owns the land on which the fill­ing sta­tion stands, it will go up by an­other 20 paise/litre. Ear­lier, the dealer earned ₹ 1.52 per litre.

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