Petroleum dealers say fuel hike is putting them out of business

Ludhiana: With no respite in the increasing prices of petrol and diesel, the petroleum dealers of Ludhiana are on tenterhooks, as they are claiming that the high rates are affecting their business. According to them, if government and petroleum companies do not take required steps, huge number of petrol pumps will be out of business and shut down permanently.
Petroleum Dealers Association Ludhiana (PTDA) on Wednesday organised an emergency meeting of their members to discuss about the problems being faced by them.
Ashok Sachdeva, chairman of the association, said, “There has been record increase in the rates of petrol and diesel and doing business has become very difficult. Our margins are fixed and with increase in the RSP of petrol and diesel, our margins have not increased, but our investments have increased. Therefore, leading to a percentage decrease in our margins. If we go by the price breakup of both products for March, our dealer margins average on petrol was Rs 3.40 per litre and on diesel was Rs 2.20 per litre, which form a very small part of the pricing while taxes both at the state and the Centre form a major part”
Sachdeva also added, “Though the Centre’s taxes are uniform for all states, but Centre has increased excise duty on petrol from Rs 9.48 per litre to Rs 32.90 and on diesel excise duty has gone up from Rs 3.56 a litre to Rs 31.80 during the last few years. However, the state’s taxes vary, and it is disturbing that the Punjab government has chosen to increase the VAT and other taxes/cess on petrol and diesel, making both products expensive than the neighbouring states. The neighbouring states like Himachal Pradesh and Haryana have in fact decreased their VAT rates and are further contemplating a downward revision while Punjab has increased the taxes since March 2020, the latest being the infrastructure development tax. Due to this, huge difference has been witnessed in the rates of fuels between the two states and customers specially those having trucks and buses prefer to get their fuel requirements fulfilled from the nearby states thus causing loss to us.”
According to Ranjeet Singh Gandhi, president of PTDA, “Petrol pumps have been losing capital and revenue since long and the onset of the Covid-19 pandemic in March 2020 has left dealers with unprecedented irrecoverable losses due to payment defaults, depressed sales, and added expenditure on safety and sanitisation. Dealers have had to invest their life savings to keep the business running and in case of further trouble, many petrol pumps may be forced to shut down. If the long due dealer margins, which have not been revised since 2017, are revised, it would help us stay in business. The oil marketing companies (OMC) instead of helping have withdrawn subsidies and normal financial assistance that helped dealers in meeting expenses for uniforms and maintaining equipment.”
Gandhi also added, “While other businesses have got financial help in one way or the other, the petrol pumps, despite working during lockdowns through the pandemic have got no help, or financial package from any quarter. It is ironical that the three OMCs — Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited — have in fact all booked record profits while dealers have lost capital and income since the onset of Covid-19 pandemic.”