CHENNAI: 25 per cent of rural petrol bunks will be forced to shut shop if the Covid situation continues for another year as petroleum dealers are struggling to stay afloat.
“We have lost 40 petroleum dealers to the virus in the State, as they, along with their employees, were working to keep fuel outlets open. But, the bigger issue is that the dealers are under immense financial strain and in the event of their demise, their families are struggling to make ends meet following the loans they have taken to keep the business alive,” said KP Murali, president, TN Petroleum Dealers Association.
TNPDA has been urging the State government and the Petroleum Ministry to declare dealers, staff, crew, and start-ups engaged in dispensing fuel as ‘frontline workers’.
“This will enable the dealers’ fraternity to avail benefits from oil companies in case of death. These benefits will help rehabilitate the dependents of the deceased,” Murali added.
But, oil industry sources said that they have not been declared as frontline workers yet. “We are vaccinating petroleum bunk attenders, cashiers, and dealers. The company has taken the onus of protecting them despite being not declared as frontline workers. We are providing ex-gratia for petroleum industry owners,” sources from the oil industry said.
Meanwhile, the dealers have been pushing for periodical revision of dealer margin. The five-member Apoorva Chandra Committee’s (ACC) recommendations were based on studies carried out before 2010. The ACC report, while recommending the margin, had arrived at a national average volume of 170 KL/month from an outlet to remain viable when the number of retail outlets stood at 45,104 in 2010-11. Now, more than a decade has passed. The number of public sector retail outlets has increased to 68,000 (as on December 2020), which has reduced the national volume to 150 KL.
With the advent of Covid-19 and the subsequent lockdowns, the national monthly average has further declined and stabilised between 100 KL and 120 KL. This has resulted in petroleum retail outlets becoming unviable during the pandemic.
“Due to insufficient margin, dealers are borrowing money from banks to run their business. If this situation continues for one more year, 25 per cent of rural dealers in the State will be forced to close their businesses,” says Murali.
The other issue troubling the fuel dealers is that ACC recommendations did not take into account the expenditures like salary, additional manpower, air gauge, air compressor, air conditioner, water cooler repairs, digital transaction charges, rental or cost of e-locks, and CCTV expenses, Murali said.