Petroleum traders threaten strike from Sept 20

After the oil companies, the oil (retail) distributors are gearing up to seek attention of the Union government for a viable business model. The Federation of All-India Petroleum Traders (FAIPT) proposes to shut down 38,700 outlets across India for an indefinite duration to draw the attention of policy-makers to address their grievances.

According to Ashok Badhwar, president FAIPT, “The Managing Committee of FAIPT has taken a decision that since our legitimate demands have not been discussed or solved by August 25, we will have no option but to close all 38,700 petrol pumps all over India from September 20, till our demands are met.”

He said the retail distributors get a fixed margin of approximately 2 per cent on invoice value whereas we lose 1 per cent because of evaporation of petroleum products, besides many other costs are involved.

He added Oil companies also charges LFR (Licence Fee Recovery) from the petroleum traders at '47 per 1,000 litre on petrol and '40 per 1,000 litre on diesel. The this should be charged as a fixed payment and not on volumes.

“Our demand is that we should get the margin of at least 5 per cent on the invoice value”, said Badhwar. The oil companies are aware of the losses incurred by the COCO petrol pumps, he added.

He said the federation has demanded uniformity in the price of petroleum products across India. This would curb the smuggling from one state to another.

He added mushrooming of petrol pumps in certain pockets has undermined the viability of the existing outlets. The Oil Companies (competing with in themselves) should refrain from opening new outlets in the areas already having density of petrol stations. Some policy framework should be evolved on this.

The communication sent by the Federation to the Government of India also explains that there is no sufficient income from non-fuel businesses as the oil companies have started charging from each enterprises like service stations, Convino stores, ATMs, pollution check machines etc.

He added the input costs like The minimum wages of staff revised upward from 33 per cent to 42 per cent and the resultant hike in PF, ESI, bonus and gratuity has effected their bottomline. Power and water tariff have also increased. All these issues have undermined their profitability, told Badhwar.

The MDG (Market Discipline Guidelines) have not been implemented after a round of eight meeting. The MDG, according to him should be implemented in letter and spirit.

He said that the federation was open to solve the issue amicably as the all-India strike would cause a huge inconvenience to the common man. But the federation has not been invited for any discussions by the Ministry of Petroleum as yet, he added.