The Hindu : Tamil Nadu News : Petroleum dealers demand commission hike

Online edition of India's National Newspaper
Wednesday, Nov 17, 2004

Tamil Nadu

Tamil Nadu

Petroleum dealers demand commission hike

By N. Ravi Kumar

CHENNAI, NOV. 16. Queues and wait will no longer bother petrol and diesel consumers. An exponential rise in the number of dispensing stations, improvement in customer service and availability of value-added facilities have made life smooth for them.

The dream run for the motorists could, however, hit a roadblock if the petroleum dealers reduce the working hours of the retail outlets. They will operate petrol pumps only from 9 a.m. to 5 p.m. if the national companies do not increase their commission.

Though the dealers are yet to fix a date for the reduced working hours, primarily to minimise operating expenses, the day is not far off. According to M. Kannan, vice-president, Federation of All-India Petroleum Traders, "in case, the oil companies do not settle the issue (of dealers commission) in the coming few weeks, we plan to reduce the timings."

The move could make life difficult for the consumers, as an overwhelming number of petrol pumps are dealer-operated. Company-owned, company-operated outlets are limited. A few of the outlets in the two-category function round-the-clock. Typically a petrol pump works from 6 a.m. to 10 p.m.

`Pressure on margin'

Claiming that the dealers' margin is under pressure as a result of the increase in (employee) wages, power tariff and the level of illumination, Mr. Kannan, who is also the president of the Tamilnadu Petroleum Dealers Association, said: "Barring a negligible increase last year, the commission has remained unchanged since January 2000."

Adding to the working expense of the dealers is the frequent change in petrol and diesel prices. "Everytime the prices are increased, we have to make more investment in the stock, which also means more interest outgo on the finances we arrange for, extending more credit to our customers and increased bank charges," he points out.

Refuting the claim that the dealers make heavy profit on old stocks whenever prices are hiked, he said: "We incur losses whenever the prices drop, as even then we are left with stocks bought at higher prices."

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