'While prices have gone up, our margins have stood still' - The New Indian Express

'While prices have gone up, our margins have stood still'

Published: 20th November 2013 12:06 PM

Last Updated: 20th November 2013 12:06 PM

Bangalore Petroleum Dealers Association is a body formed to address the requirements and rights of public sector petrol bunk dealers, i.e, IndianOil Corporation Ltd (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). It has existed for 50 years and Sqn. Ldr. G V Bhushan Narang (Retd.), is the chairman for the last three years. Previously he was the president of the association for 12 years. He is also the chairman of Akhila Karnataka Federation of Petroleum Traders. Vyas Sivanand speaks to him about the main issues faced by the dealers and the evolving new technologies in the segment. 

Why is it that there are two association within the state?

The BPDA addresses concerns of dealers in the city as Bangalore is in the limelight, with every small move by the government affecting it first.

So, it was decided to have two associations. BPDA has 400 members and it includes surrounding areas of Bangalore like Hoskote, Tumkur, etc.

What is the foremost concern of the association?

We have been facing one common issue since 1984, which has not been resolved till date. Our commission on petrol and diesel has not changed while the price of petrol and diesel has skyrocketed. We still get about `1.50 as commission per litre. It should ideally be linked to percentage.

The ministry has made a complicated formula of commission, which I think even they do not understand.

Every aspect of the business has gone up, the prices, the evaporation cost, salaries, bank interest, but the commission has stood still.

Petrol has been deregulated and there has been no incremental relief. We provide an essential commodity so we cannot protest.

When we approach the ministers in Delhi and even in Bangalore, they never say no, but then they do not do anything either. They seem to be completely dispassionate about our requirements.

In the 60s, the commission was eight per cent of the value, today it is not even two per cent out of which one per cent evaporates.

So we are left with only one per cent. Big dealers might survive because of the volumes, but what about small dealers. Their net remuneration is not workable.

What are the other issues?

When receiving the product from the depots, they have devised ingenious sealing systems but people have somehow managed to break the seal and indulge in pilferage.

There is improvement though, but not 100 per cent. Especially in remote areas, when the tanker travels from dept to the bunk, there is pilferage. And since money is always paid in advance, there is terrible loss to the dealer.

Technology is available, then why not use it to address pilferage proof seals. Today the measurement practice used is old and crude, but cheap.

It involves a dip stick which is calibrated by the  weights and measures department. Accurate flow metres should be installed because dealers are losing 50-100 litres. Officially and theoretically, evaporation is set at 0.5 per cent, but in Bangalore, it is 1 per cent.

In hot areas it is more. And then you get a 'love letter' asking why the loss is more.

Then there is the issue of quality. En route from the depot to the bunk, the driver or others pilfer adulterate it.

Just checking the density of the fuel is a crude method. I have my own tanker and my guys accompany the tanker, so I am safe. What about others?

There is always talk about crude oil becoming scarce in the near future. What is your take?

New discoveries are constantly being made. Shale oil is a big source of oil for the world in the future.

It is an unconventional oil produced from oil shale by pyrolysis, hydrogenation, or thermal dissolution.

Of course, alternate energy is also big and will finally see the light of the day. These are not being discovered for fear of drying up of oil, but for cleaner fuels which will not harm the environment.

Two years back nobody thought of LPG and CNG. So, there is lot of money being poured on research in the automobile industry. Hydrogen is explosive but is a very good option.

With Hydrogen powered vehicles, dependence on crude oil will reduce drastically. The evolution of technology is constantly happening and I am sure they will soon be able to crack several new versions of fuel, especially Hydrogen, which I am sure they will be able to tame in the near future.

Would you advise prospective dealers to come forward even after knowing that there are so many issues surrounding petrol and diesel?

All issues that I have mentioned are those which can be resolved. It is only that there has to be a strong intent to address them. And I am sure, it will happen.

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