They want reduction in excise duty and reimbursement of losses due to higher commissions to remain viable
They want reduction in excise duty and reimbursement of losses due to higher commissions to remain viable
Fuel pump dealers of 22 states will not buy any diesel or petrol from oil marketing companies on May 31, demand for reimbursement Loss caused to them by overnight excise duty cut This was announced by the Center earlier this month and a mechanism was announced to protect them from repeated excise duty changes.
“Since June 2017, when the dynamic pricing mechanism was implemented for fuel, excise duty has been revised 8 times, with five instances of excise duty reduction resulting in reduced retail selling price and loss to dealers. The Delhi Petrol Dealers’ Association along with counterparts in Tamil Nadu, Gujarat, Rajasthan, Maharashtra, Karnataka, Kerala and 15 other states said in a statement.
He said that since 2017 the excise duty on petrol products was increased thrice, the retail price was not changed and the benefit was passed on to the Oil Marketing Companies (OMCs). Apart from reimbursement from OMCs, dealers want the future price changes to be in line with the deregulated and dynamic pricing mechanism for fuel products.
regulated pricing system
Although India has officially moved to a deregulated pricing regime for fuel products, retail prices are often capped by public sector oil companies, which dominate the market, despite sharp changes in global oil prices. . In recent months, while global crude oil prices rose, fuel prices were unchanged for a longer period between November 2021 this year and March this year, and have remained frozen again since April 6.
“We demand that our loss on account of reduction in excise duty should be compensated by the OMCs and future price changes should be in line with the dynamic pricing mechanism,” the statement said. “Dealers cannot make profit on account of increase in excise duty, and should not bear the burden of loss on account of reduction.”
Last Friday, the Telangana Petroleum Dealers Association announced a plan to skip the purchase of fuel from OMCs on May 31. He said dealers in 15 other states would also do the same. By Monday, more states had joined the cause, demanding higher commissions and safeguards from losses due to tax cuts, including Andhra Pradesh, West Bengal, Punjab, Uttarakhand and northeastern states.
Dealers’ commission has not been revised since 2017 though there was an agreement with oil marketing firms to revise them every six months, petrol pump operators pointed out, even though their working capital requirement has doubled Because fuel prices have almost doubled since then.
“Our constant demand by OMCs to revise dealer commission has been ignored, and by doing so, they are making their own network financially impractical,” he asserted.