Petrol, diesel may get costlier in Delhi; higher rental to affect 400 pumps

Delhiites might soon have to pay more for motor fuel, a sequel to an earlier decision by the Delhi Development Authority (DDA), the land allotment agency, putting outlets retailing these in the same commercial category as malls.  

Sources say the resulting higher rentals might affect at least 400 outlets in DDA areas. The decision to raise land rentals with effect from 2007 has been contested by Hindustan Petroleum Corporation (HPC), Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPC) in the Supreme Court. The case is in court for some months. Meanwhile, talks are on between the three oil marketing companies (OMCs) and DDA. Sources say if there is no agreement soon, the companies will be passing on the higher rentals.

The combined impact on fuel retailing outlets is estimated at Rs 12 billion. “We might have to pay the claim with retrospective effect and interest. We have been contesting this move, stating that selling of petrol and diesel cannot be categorised along with malls,” said an official. 

As on Sunday, Delhi had the lowest fuel prices among all the four metros, with petrol priced at  Rs 71.06 per litre and diesel at Rs 61.56 per litre. Mumbai has the highest petrol price at Rs 78.94 and diesel at Rs 65.53. 

OMCs acquire land for all fuel outlets in Delhi and develop the basic infrastructure for the dealers. In the fuel pricing formula adopted by the companies, the product is at par with the international price till the refinery gate. After that, a cost-plus model for transport and other charges, including taxes, is followed. 

Commercial land rentals in the capital state are the highest in the country. Delhi consumers already pay Rs 19.48 as excise duty and Rs 14.7 a litre as value added tax, along with a dealer commission of Rs 3.57 a litre. 

As on November, the country had 61,079 fuel outlets — IOC had 26,578, BPC 14,197 and HPC had 14,720. Private  companies Essar, Reliance Industries and Shell ran 4,087, 1,400 and 93 fuel stations, respectively. From April to November, the country’s petrol sales saw a rise of 8.6 per cent compared to a year before; diesel posted growth of 5.3 per cent in the same time.