In a letter to marketing directors of the state-run fuel retail companies Indian Oil, BPCL and HPCL, All India Petroleum Dealers Association president Ajay Bansal said the dealers earn commission on each litre they sell, which means the less they sell the more they lose.
“The dealer margin is Rs 27,500 per month on a national average monthly sale of 170 kilolitre (kl) per outlet (before the lockdown), which has fallen to l kl per month due to lockdown. This is resulting in huge operating losses,” he said.
He said though the pumps are operating with fewer employees, there are certain fixed costs towards fixed charge for power connection, salary, bank and stamping charges do not reduce in proportion to lower sales.
There is also heavy loss due to higher evaporation of the fuel stock sitting in tanks for longer periods in the absence of any sale.
They are seeking remedial measures by way of higher commission and subsidy on staff salary and other costs. “The dealers have paid salaries for March as per government advice and wish to continue doing the same, but for how long? We would be suffering heavy losses till the sales returns,” Bansal said.