CHENNAI: The intense competition in the automobile fuel marketing sector is poised to take a new turn with Bharat Petroleum Corporation Limited (BPCL) planning to go it alone in the tendering process for transportation of petrol and diesel.

Apart from proposing to invite bids on its own — hitherto the transportation tender was floated on the industry basis — it seeks to introduce major changes in conditions including one stipulating that only those with 10 tanker trucks can participate. Out of the 10, the bidder must own three.

While senior officials in the oil industry look at the move as more than just an initiative to improve efficiency and ensure quality and quantity, BPCL dealers with only a couple of vehicles are worried about being in the red. A senior official of Indian Oil Corporation did not discount the possibility of the proposal being the beginning of the end of the product sharing agreement among the public sector oil companies. Sources in BPCL, however, say the key objective of the proposal is to create a network of transporters, preferably large and reputed, who are loyal and ensure quality and quantity in supply of products to retail outlets even during strikes. Towards this, the company has decided to offer minimum guaranteed mileage (utilisation of the vehicles) for the transporters.

Minimum payment

In the event of the vehicles being operated below the guaranteed kilometre, the company will still make the minimum payment. By doing so, BPCL intends to attract large transporters and overcome the problem faced with small operators who switch to supplying water. The minimum guarantee will help the transporters retain their workforce, especially the trucks' crew, and offer better remuneration to them.

Noting that under the existing system the company has to deal with too many transporters and trucks, putting pressure on oil installations and officials, BPCL sources say the tender, likely to be floated in March, will ask for a mix of different capacity tanker trucks. Since the petrol and diesel requirement of the retail outlets differ, the company is considering introducing higher capacity vehicles instead of those built to handle 12,000 litres. The fuel required for the trucks will be on the company's cost. IOC officials, however, do not discount the possibility of the BPCL tender model being replicated by the industry.

This is something that the dealer community is worried about.

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