OMCs Hike Dealer Commissions
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.