CHENNAI/PUDUCHERRY: The fall in fuel prices may have brought some relief to motorists but petroleum dealers in the State are a harried lot. The reason being them having filled up underground tanks at old rates before sudden slash of excise duty resulting in their loss of approximately Rs 165 crore, according to Tamil Nadu Petroleum Dealers Association (TNPDA).
KP Murali, president of the TNPDA said the sudden price slash has impacted 5,500 fuel outlets in the State. “On an average, each outlet has lost Rs 3 lakh to Rs 4 lakh,” he added. Dealers usually purchase petrol and diesel by paying full excise and value added tax (VAT). They sell it through Retail Selling Price (RSP) fixed by public sector undertaking companies and not by dealers. “When excise price was reduced, it was immediately passed on to dealers resulting in a heavy loss,” said Murali.
Petroleum outlet dealers in the State now seek compensation from oil companies as they claim it will have a negative impact on their financials to operate outlets and maintain sales. “We are going to write a letter to State heads of oil companies and the Petroleum Ministry. Each dealer in the State will be sending details of losses they incurred,” said Murali.
A petroleum dealer told TNIE that usually when the Union government slashes or increases excise duties, they announce a date. This time it was now done. “Previously when the price was hiked, the oil companies did not pass on the price to dealers but it was adjusted internally. Now they have passed the reduction to dealers,” rued Murali. Officials from oil majors could not be contacted.
Meanwhile, in Puducherry, around 110 dealers have suffered losses ranging from Rs 2 lakh to Rs 15 lakh based on their stock. Secretary of Puducherry Petroleum Dealers Association A Murugesan told TNIE, “We did not celebrate Deepavali. The oil companies are not reimbursing the excise duty paid in excess for their unsold stock, claiming it is a government decision and it is not in their hands.”
As per the dealership agreement with the oil companies, a minimum stock for three days have to be maintained, said Murugesan. Besides, the oil companies have pushed for month-end sales by giving credit on October 31; most of the dealers have availed themselves of this credit depending on their requirement and unloading capacity. They not only stocked the underground storage but also maintained the stock on wheels (transport truck).
These trucks have a storage capacity of 12 KL to 20 KL (in compartments to store both petrol and diesel). Further, after unloading the stocks, the dealers got fresh stocks on November 1, 2, and 3, he said. However, the Puducherry Dealers Association welcomed the reduction of VAT. It will boost industrial, transport, and tourism activities and in turn will increase the sales of fuel, the association members said.