Petroleum dealers across Telangana on Tuesday staged protests and boycotted purchasing petrol and diesel from the national Oil Marketing Companies (OMCs) demanding higher commissions and a mechanism that safeguarded them whenever excise duty on fuel was reduced.
The dealers of Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) staged protests in front of their respective oil depots in Hyderabad and obstructed the OMCs' trucks from entering into the depots.
The dealers' association claimed that there was an agreement between the OMCs and the dealers' association that the dealers' margins would be revised every six months, but that this had not been done since 2017.
The prices of fuel had almost doubled since 2017, and hence the working capital in the business had also doubled, leading to additional loans and bank interest.
The evaporation losses had also increased proportionately, it said.
The association said that the campaign to not purchase fuel from oil companies was triggered by the non-increase of dealer margins over the past 5 years and the issues with the losses incurred due to the excise duty revisions by the government.
"The dealer commission is essentially a reimbursement of our expenses like salaries, electricity bills and others, which have increased manifold during the last five years. Our demand is for a revision of the dealer commission which has been overlooked by the OMCs," an IOCL dealer said.
The association demanded that the losses on account of excise reduction should be reimbursed by the OMCs, and that future price changes should happen in line with the Dynamic Pricing Mechanism.
"A mechanism should be in place to insulate dealers from excise duty changes. Dealers should not neither make profits due to increases in excise duty nor be burdened with losses due to its reduction," it demanded.