Petrol pump dealer commission raised, retail prices remain unchanged

Commission paid to petrol pump dealers on sale of petrol and diesel has been hiked without change in retail price but rates will go down in several places in states such as Odisha, Chhattisgarh, and Himachal Pradesh on account of intrastate freight rationalisation.

Commission on sale of petrol has been hiked by 65 paise a litre and that on diesel by 44 paise per litre. Alongside, the state-owned firms also rationalised intrastate tariffs which could lead to a reduction in rates of up to Rs 4.5 a litre in some parts.

Indian Oil Corporation (IOC) -- the state-owned market leader -- on October 29 wrote to dealers informing of an increase in dealer margin for all categories.

"Considering the hardship of retail outlets selling less than Rs 170 per kilolitre per month, special care has been taken to alleviate the same," it said. "You will be entitled to an upward revision of dealer margin of approximately Rs 0.65 per litre for petrol and Rs 0.44 a litre of diesel."  This is the first revision in commission paid to dealers in nearly eight years.

All the three state fuel retailers -- IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) -- took to X to announce the revision in dealers' commission.

"IndianOil is pleased to announce a revision in the dealer margins (effective from 30th October 2024), following the resolution of a pending litigation. This will have no additional impact on the Retail Selling Price of products," IOC said in a post on X.

BPCL in a post said the revised commission will be effective October 30. This would be "at no additional cost to consumers".

"On the auspicious occasion of Deepawali, HPCL is happy to announce revision in dealer commission effective 30th October 2024. This will have no additional impact on the Retail Selling Price of Petrol & Diesel," HPCL said. "Thru this revision, HPCL aims to strengthen the ability of our dealer network in delivering superior customer experience and enhanced service standards for millions of customers who visit our Retail Outlets on a daily basis."  The revision, it said, also aims at delivering happiness to all the committed staff employed at retail outlets and their families.

Dealers commission was last revised on October 5, 2016 when it was raised to Rs 1,868.14 per kilolitre, plus 0.875 per cent of produce billable price on petrol and Rs 1,389.35 per kl plus 0.28 per cent of product billable price on diesel. This has now gone up up Rs 0.65 per litre on petrol and Rs 0.44 a litre on diesel.

The three firms also rationalised intra-state freight that will result in a cut in petrol and diesel prices in several places in states such as Odisha, Chhattisgarh, and Himachal Pradesh.

"Further, demonstrating the core value of Nation First, our endeavour to provide affordable petrol and diesel across the length and breadth of the country on a sustained basis has come to fruition. #IndianOil has undertaken intrastate rationalisation of freight which will reduce variation of retail selling price of product across various markets within a state, except in geographies where Model Code of Conduct is in place," IOC said.

BPCL said intra-state freight rationalisation will reduce price disparities in petrol/diesel, benefiting consumers, especially in remote areas.

"Simultaneously, we have also undertaken intrastate rationalisation of freight thus benefiting customers at remote places, far from our supply locations, except in areas under model code of conduct," HPCL said.

Oil Minister Hardeep Singh Puri welcomed the intra-state freight rationalisation which he said will "benefit consumers located at remote locations (far from petrol and diesel depots of oil marketing companies) which will result in a decrease in petrol and diesel prices in several parts of the country. (Decision in poll-bound states and constituencies will be implemented later)".

In a post on X, he cited the example of Kunanpally and Kalimela in Odisha's Malkangiri where petrol price will reduce by Rs 4.69 and Rs 4.55, respectively; and diesel rates will be cut Rs 4.45 and Rs 4.32, respectively.

Similarly, prices will reduce by Rs 2.09 in petrol price and Rs 2.02 in diesel price in Chhattisgarh's Sukma.

Rates will also be cut in Bijapur, Bailadila, Kateykalyan, Bacheli, and Dantewada of the state.

Similarly, prices will also be cut in several places in Arunachal Pradesh, Himachal Pradesh, Uttarakhand, and Mizoram.

"The dealer commission increase will provide better services to approximately 7 crore citizens who visit our fuel retail outlets in the country everyday, without increasing fuel prices," he said.

"The fulfilment of this demand pending for the last 7 years will bring joy and happiness in the lives of petrol pump dealers and nearly 10 lakh staff working at more than 83,000 petrol pumps across the country."  Ajay Bansal, President of All India Petroleum Dealers' Association, welcomed the decision saying it will help meet a part of the increase in cost of running petrol pumps over the past eight years.

"This revision comes after seven years and eight months. We welcome it," he said, adding that the dealers have withdrawn a legal case they had filed against the oil companies over oil companies enforcing marketing discipline guidelines.

The dealer commission revision has happened following the withdrawal of the court cases.