Oil companies raise rate of commission paid to fuel pump

New Delhi [India], August 4 (ANI): Fuel retailers have increased the rate of commission to be paid to the fuel pump dealers by up to 43 percent for petrol and by up to 59 percent for diesel.

The Indian Oil Corporation Limited on Thursday while announcing this through their press statement said, "The increase in dealers' margin is in slabs with respect to volume and the category of the dealer (A & B site retail outlets, or petrol pumps). It is approximately 9 per cent to 43 per cent in MS and 11 per cent to 59 per cent in HSD."

As a part of this current revision, Central Minimum Wages have been introduced for employees working at the fuel pumps, which are approximately 50 per cent higher, in lieu of State Minimum Wages.

"The oil industry has approximately 9 lakh customer attendants working at petrol pumps, who will be benefitted by this," read the statement issued by the Indian Oil Corporation.

Dealers have also been instructed to ensure that all employees working at their petrol pumps are covered under Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana.

Keeping in mind the hardship of petrol pumps selling less than the average of 170 kilolitre of fuel per month, largely in low-potential sectors like rural and remote areas, special care has been taken to alleviate the same with slab-wise business return.

This initiative is expected to improve service levels at the petrol pumps in far-flung areas.

The Net Fixed Assets (NFA) has also been revised on the basis of the recommendations given by the IIM-Bengaluru after a study, as per which this initiative would give them reasonable compensation on investments made in the petrol pump.

Return on NFA for Dealers was last revised 20 years back.

Apart from this special emphasis has been given to improve customer service to ensure that both quality and quantity are fully assured to customers at the petrol pump.

Maintenance and cleanliness of the petrol pump has also been assured.

Dealers' margin is generally revised after a certain interval of time in order to account for increase/decrease in Operating costs, Cost of working capital, Business return to the dealer, Return on investment in fixed assets by the dealer and Cost of product losses.

The dealer's margin was last revised on March 31, 2017. (ANI)

This story has not been edited. It has been published as provided by ANI