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According to retailers and dealers, RIL offers a discount of Rs 5 on petrol worth Rs 300 and Rs 10 on diesel of Rs 1,000. For diesel worth Rs 12,000, the discount is Rs 225. An RIL executive confirmed this.
"Post deregulation, our business has picked up pace but we have to provide discounts if we need to attract more customers. There is a misconception among customers that RIL outlets charge more for fuel. We have to dispel these notions if we need business," said an RIL dealer from Gujarat.
A senior RIL executive confirmed the development, but declined to divulge further details.
According to dealers, bulk buyers and transporters who facilitate transporting of fuel to remote locations find these discounts attractive.
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RIL, which has re-opened a few of its outlets since the diesel de-regulation on October 18, operates 300 outlets. It has 1,400 outlets.
According to RIL dealers, while some have agreed to re-open their outlets, others are still demanding an increase in dealer commission.
While a few company-owned pumps have already begun dispensing fuel, around 150 dealer-owned, dealer-operated; or company-owned, dealer-operated outlets will be re-opened at a later stage.
At company-owned, dealer-operated outlets, RIL takes care of the cost on account of services.
In May 2008, RIL had closed its fuel pumps owing to mounting losses, as it was selling fuel at rates much higher than the subsidised prices of state-owned oil companies. RIL's fuel retail market share is less than 0.5 per cent.
A few of RIL dealers who have been demanding higher commission from the company have declined to re-open their outlets.
A few others, however, have agreed. "Some dealers are claiming losses for non-operation of their retail outlets for the past four years. They do not plan to re-open the outlets till they are reimbursed. However, others have softened their stand and plan to begin operations at their outlets," said an RIL dealer.
Dealers say they have invested between Rs 2 crore and Rs 4 crore in each outlet. Depending on the location, the cost of land is between Rs 1.5 crore and Rs 3 crore, with another Rs 30 lakh to Rs 1 crore thrown in for maintaining services at the outlets.
RIL, dealers said, has communicated to them that it will revise their commissions after re-starting of the retail outlets. Dealers are also seeking a bank cash credit facility, under which RIL would facilitate loans to the dealers at lesser rate of interest than market rates.
"Earlier, this cash credit facility was in place which has now been discontinued. We are demanding that RIL begin this facility again so that we can spruce up our outlets," said a dealer, adding that till a few years ago, banks provided them with cash credit for their products which they were to repay in 15 days or less.
Of the private players, RIL has one of the largest network with state-of-the-art infrastructure. Essar Oil, dealers said, has no plans to offer discounts in the near future.
