Dealer commission:Current status

Dear Dealers,

Please read the following news item to know about the current status of Dealer commission.






Panel push for fuel price hike

13 Apr 2011


PETROLEUM BAZAAR New Delhi, Petrol and diesel prices can go up marginally by 50 paise and 20 paise respectively, if the government accepts a committee report on raising dealers’ commission. However, a more sharp increase will occur if the government pays heed to state-owned oil retailers’ plea to up prices. The surge in global crude oil prices has created a yawning gap between costs and prices that has led to the retailers losing Rs 17 per litre on petrol and Rs 4 on every litre of diesel. Any government decision on allowing the oil companies to raise fuel prices is expected only after the assembly elections to five states are completed in May, sources said. The oil ministry committee looking into dealer commission — the panel is headed by joint secretary (marketing) — has proposed an increase in commission of Rs 393 per kilo litre (kl) for petrol to Rs 1,611 from Rs 1,218 and Rs 170 per kl for diesel to Rs 927 from Rs 757. The committee was set up in September following an agitation by the dealers. Threatening an indefinite strike, the dealers had demanded an immediate upward revision as well as a formula that will lead to an automatic revision in their commissions with any change in petrol and diesel prices. Subsequently, the commission was raised by Rs 93 per kl for petrol and Rs 84 per kl for diesel. On the committee’s recommendation, Federation of All India Petroleum Traders president Ajay Bansal said that “this is a marginal hike. We have been demanding doubling of the commission in view of inflation and increase in other costs. We would soon meet the government to press for our demand”. The federation says it represents all the 38,700 petrol pump owners in the country. The committee, which also comprises director (marketing) of IOC, BPCL and HPCL, rejected the dealers’ demand of 5 per cent commission on the total value of petrol and diesel sold. Accepting it would mean that the “dealer commission varies on account of changes in the taxation structure by the Centre or the state governments. This is not an acceptable way of computing dealer commission as taxes should not play a role in arriving at dealer commissions”. The committee report said 90 per cent of the commission in petrol and 89 per cent in diesel went towards the reimbursement of various costs incurred in the running of retail outlets, including manpower, electricity, product loss compensation and working capital expenses. As the oil sector moves towards de-regulated pricing of petrol and diesel, the committee said there was a need to move away from the norm of uniform commission practised in the country. However, it said the dealers might not yet be ready for market level pricing principles as it would lead to substantial variation — as much as 40 per cent between the lowest and the highest commission — across states. Bansal said “the government has to fix the dealers’ commission uniformly across the country as leaving the commission to oil firms would result in corruption. An element of whims and fancies of the oil firms could also come into play.” Retailers bleed As the Indian basket of crude oil touched a 33-month high of $120.36 per barrel, the three state-owned oil firms — IOC, HPCL and BPCL — are pressing the government to hike petrol and diesel prices. The companies are losing Rs 17 on every litre of diesel and Rs 4 on petrol, which were deregulated in June last year. The loss of kerosene is Rs 28 per litre, while for domestic LPG cylinder it is Rs 315. The three oil firms “at current international crude oil prices lose Rs 174,126 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in 2011-12 fiscal,” officials said. The basket of crude India buys averaged $83.57 per barrel in 2008-09, and calculations for 2011-12 fiscal have been done at around $110 a barrel. In the 2010-11 fiscal, the three firms lost Rs 78,061 crore, but so far the government has provided only Rs 20,911 crore in compensation. In 2008-09, the government had issued oil bonds worth Rs 71,292 crore to the three firms to make up for more than two-thirds of the revenue loss. Upstream oil firms such as ONGC provided another Rs 32,000 crore. Courtesy: The Telegraph



11 Responses to Dealer commission:Current status

  1. lokesh says:

    Proposed increase in commission is minimal given the increase in cost. Federation must give a call for a nation wide strike to force the Govt. to act. Dealers are at the receiving end be it from the Company, labour department, food and civil supplies dept. and consumers. While we learnt about the proposed increase in commission from 18th April, the non-announcement has led to uncertainty which may be postponed till the completion of elections.

  2. Aaditya says:

    Please can anyone tell me when will the dealer commission increase. How long will it take

  3. MAHENDER B says:

    proposed increase in commission is late by 3 years when inlation was far far away as of now we retail outlet dealers are in a pathetic situation whose earnings are washed away by all day-to-day expenses and v r crushed by oil co’s putting up new outlets to show their presence inthe market.

  4. amberbhargava says:

    every dealer wants increase in commission but all said and done no one takes a stand for going on strike on all india level.our leaders give call for strike but back out at the last moment because they are either give some false promise by govt or given some freebies in form of new petrolpump or gas agency.i had been listening for last 10years for raise in commission at5% of base price of products.but till date no one is able to do so. many of our politicians are dealers themselves but there pertolpumps are located in such high volumes area that they are minting money and also no officer dares to visit or inspect there respective petrolpumps for it left to marginal dealers who are many. who earn there bread and butter from running petrolpumps to keep there fingers crossed and hope for revision of is like there is drought or sukha and people looking towards sky and praying to god to give rain.

  5. pankaj says:

    Baabu these are the slogan from the past 14 yearsof our great leader ship who are enjoying highsales volumes and new ro and other favors of omc’s 5% commission ,commission for redressal ,time bond disposal of represtations of dealers/tribunal. Every one know the accord was signed by omc’s and Faipt but no one know why not followed by omc’s and faipt why quite and silent.

    Baabu ye public sab jaanti hai par bolti …….
    Number of dealers crushed by marker which is purchaged by illlegal manner(cbi Investigation still going with tortosialspeed). omc itself accept the marker is washable but innocent dealers are deprived from their dealerships and forcely take over by omc’s.
    jaagte hua sapne mat dekho yeh commision due infilation revise ho raha na ki aapki faipt ke pressure se

  6. gangadhar says:

    the representatives of association are to blame for less commision,since they are all high selling r.o dealers they are not interested for commition slabs since their margins will come down,so they are not representing major number of dealers who are selling less than 100 kl per month,high selling dealers in india who are selling above 500 kl per month are may be 5000 dealers ,above 1000 kl dealers may be 100 only,corporations must understand most of their sales is done in low volume r.o.s due to their numbers, the corporations and ministry using dealers as front man to have their obligations-say elections,expences by corporation.why new dealerships are required when existing dealers are not surviving.cause the ministry will say service to more people ,corporation say if not me somebody will, at the cost of new dealer life and self esteem. we all came to this bussiness expecting it as any other trade of profit .but corporations say you came with full understanding ,yes we expect the same rules as they lay on us to them. we are to take care of our customer by their guidelines but they dont care about low volume dealer ,how they are expecting all electrical gadgets to be used by low salried boy,represent us to ministery for high commition

  7. pankaj says:

    Omc’s are making losses in retail Indian oil marketing companies are white elephant for the govt of India these corporations always try to communicate that these corporations are facing hardship due to subsidy and rate differenes. But infact these corporations are enjoying huge profits in there retailbusiness i.e.12000 litres of tank-truck in fact they release11800litersdue to temperature variation,in intercorporation transit they issue11800-20-40as temrature at the very same time on other lorry realising in favor ofretailoutletinvoiced12000litres. How can its possible 100to120litres of valuble product grabbed by these corporations (ioc/bpcl/hpcl/ibp). In present condition subsidised products are also grabbed by their officers (who are highly paid by the govt) and oilmaafia naxus, about 5years back bpcl chairman accepted about 40,000 crore market in india. Can this act be done in india by any one can notrun without shelture and direction of oil companies-official. Some official are expertized in giving protection to these oil-maafias , but some times in some cases malpratice recorded in consinements of corporations and there depots and various locations. How sad is but no one careing

  8. Sharan says:

    Federation dealers are not doing anything to improve the lot of petro dealers, otherwise how can lorry drivers dare to loot the oil in broad daylight. At the gate of BPCL’s Sangrur depot Grewal dhaba is notorious for oil theft. Approximately every tanker of three companies stop there. They opened the lock and decant 40-50 litres of product. This is being done in the daylight on the main road. Some days ago I have seen the theft from BPCL lorry with my own eyes and the cursed lorry bears registration number 6821. I had informed the concerned dealer. On return I had seen some people who were filling the tank of a truck with stealth fuel on this dhaba. I have photographs of that truck. If petro dealers union have guts to force the closing of these shops of looters, like Grewal Dhaba. If they are meak poor spectators, whose precious poduct is being looted by 2 taka drivers.

  9. KUMARDAS says:

    As long as there is no unity amoung dealers we will not get any nominal commission on petroleum products. The petrol bunk business will slowly come down and only the kings will retain their outlets in the country. We dealers should fight for commission in % or else in the comming years it will be very difficult for operating a retail outlet. We should demand 5% commission for dealers who sell between 1 to 50 kl, 4% for 50 to 100 kl, 3% for 100 to 150 kl, 2% for 120 to 150 kl and so on till the present day commission for a higher level of sales.
    We should demand higher priority like pension for our staff, cheaper electricity, reduceed bank intrest, etc
    If we do not form a new association to fight our demands as per our sales volume its better we forget the profitability of our business.

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