Petrol pump operators seek financial support as losses mount on falling fuel sales

With coronavirus eviscerating demand, petrol pump operators on Friday said per pump sales have fallen to less than one-tenth, leading to heavy losses in establishment and employee cost.

The All India Petroleum Dealers Association (AIPDA), which claims to represent the bulk of about 64,000 petrol pump operators in the country, sought a financial relief package from the oil companies to help business run.

In a letter to the marketing heads of three state-owned oil firms, AIPDA president Ajay Bansal said in line with national duty, petrol pump operators have been running outlets right through the nationwide lockdown imposed to check the spread of coronavirus.

But sales have slumped as most vehicles have gone off the road. Per retail outlet sales have fallen from a national average of 170 kilolitres per month to about 15 kl now, he said.

"Out trade is totally dependent on sales as we get margin on per lire basis. This means that less you sell the more you lose," he wrote adding the dealer margin came to Rs 27,500 per month at 170 kl per month sale basis.

Despite operating with fewer staff, petrol pumps have to fixed charges to pay - electric metre charges, staff salary, bank charges, stamping charges, etc which do not reduce in the same proportion as sales reduction, rendering heavy losses to the dealers, he said.

"The dealers have paid March 2020 salary to the staff as per the government advice and wish to continue doing the same but for how long? We would be suffering heavy losses till sales return to normal," he said seeking a financial relief package for petrol pump operators.

He wanted losses to be compensated by increasing dealers commission immediately. Also, oil companies should provide subsidy on electricity and staff salaries.

Petrol and diesel sales have slumped over 66 per cent in April as the nationwide lockdown halted economic activity and travel.

In March, that saw travel restrictions being placed in the second half of the month, diesel sales contracted by 24.23 per cent to 5.65 million tonnes. This is the biggest fall in diesel consumption the country has recorded as most trucks went off road and railways stopped plying trains.

Petrol sales dropped 16.37 per cent to 2.15 million tonnes in March as the 21-day nationwide lockdown enforced to prevent the spread of COVID-19 took most cars and two-wheelers off the road.