Petrol pump own­ers not keen on more out­lets

They fear that their sales vol­ume may come down dras­ti­cally if 65,000 new petrol pumps are set up.

The Sunday Guardian - - Nation -

Ex­ist­ing petrol pump own­ers are op­pos­ing Cen­tre’s re­cent move to al­lot about 65,000 petrol pumps across the coun­try over the next five years, which will al­most dou­ble its ex­ist­ing net­work. Their op­po­si­tion is pri­mar­ily be­cause of the fear that their sales vol­ume may come down dras­ti­cally if new pumps are opened. Last week, the pub­lic sec­tor oil com­pa­nies de­cided to al­lot about 65,000 petrol pumps across the coun­try which will al­most dou­ble the ex­ist­ing re­tail net­work. The In­dian Oil Cor­po­ra­tion (IOC), Bharat Petroleum Cor­po­ra­tion Lim­ited (BPCL) and Hin­dus­tan Petroleum Cor­po­ra­tion Lim­ited (HPCL) is­sued ad­ver­tise­ments for set­ting up 55,649 petrol pumps across the coun­try. This, how­ever, does not in­clude any sites in Mad­hya Pradesh, Ra­jasthan, Ch­hat­tis­garh, Te­lan­gana and Mi­zo­ram where Assem­bly elec­tions are un­der­way.

The present petrol deal­ers are re­sist­ing the move as they are wor­ried that there will be cut-throat com­pe­ti­tion if new pumps are opened in such a large scale and their sales will dip sharply. “There is no fuel short­age while sales vol­ume is less. The an­nual growth in sales is just 4%. In such a sit­u­a­tion, there is no logic to dou­ble the num­ber of petrol pumps. We can un­der­stand if new pumps are opened along new high­ways but open­ing them where there are al­ready suf­fi­cient pumps makes no sense,” said Ajay Bansal, pres­i­dent of All In­dia Petrol Deal­ers As­so­ci­a­tion (AIPDA).

They claimed that about 80% of the to­tal re­tail out­lets are al­ready un­der se­vere stress due to low sales, which adds to their fi­nan­cial losses and debt bur­den. Ac­cord­ing to a gov­ern­ment com­mit­tee, a petrol pump is vi­able only if it sells a min­i­mum of 1.70 lakh litre of fuel ev­ery month. And most of the petrol pumps are selling only this amount of fuel per month and there­fore, these are some­how re­main­ing vi­able, they ar­gue.

Bansal also said the gov­ern­ment’s de­ci­sion is con­trary to its own pol­icy. “The Cen­tre has an­nounced clo­sure of petrol pumps re­plac­ing them with al­ter­na­tive fu­els like elec­tric­ity, CNG and bio-fu­els by 2025. But they have now pub­lished ad­ver­tise­ments for al­lot­ting new petrol pumps,” he won­dered.

At present, In­dia has 63,674 petrol pumps, most of which are with the pub­lic sec­tor com­pa­nies. Na­yara En­ergy Ltd, formerly known as Es­sar Oil Ltd, has the high­est num­ber of out­lets in the pri­vate sec­tor at 4,895, while Re­liance In­dus­tries has 1,400 pumps. Royal Dutch/Shell has 116 out­lets.

The deal­ers also feel that with the pro­posed dou­bling of re­tail out­lets, the av­er­age sales vol­ume of both the ex­ist­ing as well as new deal­ers would fall, which will be a bad sit­u­a­tion for both.

This is the first time in al­most four years that the al­lot­ment of petrol pump sites is be­ing ad­ver­tised. The al­lot­ments will be done on re­laxed guide­lines which have low­ered the ed­u­ca­tional qual­i­fi­ca­tion to 10th pass from 12th pass and grad­u­ate cur­rently and the only es­sen­tial re­quire­ment is own­er­ship of the land where the pump is to be set up.

IOC, which al­ready has 27,377 petrol pumps across the coun­try, has ad­ver­tised for set­ting up 26,982 more in states which are not go­ing to polls. BPCL will add 15,802 out­lets to its ex­ist­ing strength of 14,592, while HPCL would add 12,865 to its ex­ist­ing tally of 15,287. Delhi has 390 petrol pumps, while 170 more are to be set up as per the de­ci­sion.

The ex­pan­sion, ac­cord­ing to of­fi­cial sources, is be­ing un­der­taken to meet grow­ing fuel needs and for the con­ve­nience of cus­tomers in emerg­ing mar­kets, like up­com­ing high­ways, agri­cul­tural pock­ets and in­dus­trial hubs. The re­tail out­let net­work in ru­ral, re­mote ar­eas is also be­ing ex­panded with the aim of in­creas­ing avail­abil­ity of oil prod­ucts.

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