[AutoNoob]

Originally Posted by sumzup

Hi Friends, as you may all have heard about the protest planned for tomorrow and day after by the petrol bunk dealers

Originally Posted by jeepster

Its a part of nationwide protest by Indian Petroleum Dealers (CIPD) & All Maharashtra Petroleum Dealers Association (FAMPEDA) includes 54,480 petrol pumps nationwide.

What is the reason for this protest ? Is it related to dealer commission or something else ? As far as I remember, commission was hiked last month only ?

[CarguyNish]

Originally Posted by AutoNoob

As far as I remember, commission was hiked last month only ?

But, that isn't enough for many. Increase has been in few paisa which hardly makes difference. AFAIK, they are expecting the value to be up in range of tens rather then units. Ex 15-30p instead of 5-9p.

The losses they get when fuel is transported isn't that recoverable. Also, compared to this(Petrol/Diesel) all other business have higher margins.

[AutoNoob]

Originally Posted by CarguyNish

But, that isn't enough for many. Increase has been in few paisa which hardly makes difference. AFAIK, they are expecting the value to be up in range of tens rather then units. Ex 15-30p instead of 5-9p.
The losses they get when fuel is transported isn't that recoverable. Also, compared to this(Petrol/Diesel) all other business have higher margins.

Surprisingly I have not seen any bunk closing down in last two years (after the so called de-regulation of petrol & diesel). If indeed they are facing losses, then I wonder how they are able to sustain.

PS: On personal note, one of my known ones has a petrol bunk (Essar) in a rural area (where volumes are not as high as highway or city). He's providing the standard services which are usually missing rural setup; Unadultrated Fuel with assured quantity, Cool Clean Drinking Water, Clean Toilets, Air pressure check etc. Though I don't have the numbers with me, I can say one thing, he is still making good profits. Also, he's able to break away customers from upto 10 kms radius becasue of the reputation he has gained in the area.

[sumzup]

Originally Posted by AutoNoob

What is the reason for this protest ? Is it related to dealer commission or something else ? As far as I remember, commission was hiked last month only ?

Hi AutoNoob, You are partially right when you say that the commission was hiked last month and again you are partially right regarding the reason of protest but on both the counts what you are not aware is that the hike last month was about 10 paise which is minuscule to what had to be done. In fact, it was a joke on all the dealers. Coming back to the other part of the current protest, it also includes the rates related to the transport of fuel do the bunks. The rates of transportation is so low that it makes the transport owners resort to stealing from the tankers and that leads to under-delivery to the bunks who then are put to a lot of hardship in making up for the losses. It also includes implementation of findings done by a committee way back in 2011 for the overall development and betterment of this business and dealers in this business.

The dealers' situation is extremely precarious as they get hit due to the evaporation losses, tank lorry losses, freebies that are doled out to everyone in the industry on a monthly basis, excess competition, low commission which is invariably proportion to the current market standards. I'm not saying all these to justify anything but it is just that the general public is not aware of the issues that dog the industry due to which we do not get enough empathy from them

[sumzup]

Originally Posted by AutoNoob

Surprisingly I have not seen any bunk closing down in last two years (after the so called de-regulation of petrol & diesel). If indeed they are facing losses, then I wonder how they are able to sustain.

PS: On personal note, one of my known ones has a petrol bunk (Essar) in a rural area (where volumes are not as high as highway or city). He's providing the standard services which are usually missing rural setup; Unadultrated Fuel with assured quantity, Cool Clean Drinking Water, Clean Toilets, Air pressure check etc. Though I don't have the numbers with me, I can say one thing, he is still making good profits. Also, he's able to break away customers from upto 10 kms radius becasue of the reputation he has gained in the area.

Hi AutoNoob, There are definitely churning within the industry which may not be visible to the general public. There are several owners who have run into debt traps and as you point out, can't reveal it in the open due to various reservations which include personal dignity. Essar is a private bunk and their profit structure to their dealers are different and infact that is one of the reasons that this industry is suffering where the private dealers are treated differently to the PSU dealers. The transportation is far superior and their losses are covered better. It is another thing that when the crude prices start going north, which it will sooner or later, these private dealers will not be able to sustain due to lack of subsidy and loss of sales but till then it is happy hunting for them.

As far as the facilities are concerned, today most of the bunk are totally automated and basic conveniences like water, clean toilets, quality and quantity are assured to all their customers and otherwise. Profits are directly proportional to the investments, capital employed, and returns on investment minus the net expenses so I would not go deep into this as it is a variable that cannot be equated across all the dealers.

[AutoNoob]

Originally Posted by sumzup

As far as the facilities are concerned, today most of the bunk are totally automated and basic conveniences like water, clean toilets, quality and quantity are assured to all their customers and otherwise.

Yes, this is true in cities and on major highways. The in rural areas (particularly in Uttar Pradesh), these are still luxury. The usual reason that I have heard that is volumes of fuel are not so high to cover for the additional expenses. Adulteration, short-selling the quantity is rampant. That's why his bunk has gained in reputation.

One more thing I failed to mention, he offered a corner of his farm land (across the road) to a tea & snack vendor without rent. There was no such shop nearby and it became a stop for road users. This vendor provided free advertisement (word-of-mouth) for the bunk, turning casual stoppers as customers for the bunk . Most of those customers have now become regular customers.

[vvrchandra]

Petrol price hiked by 89 paise and diesel by 86 paise respectively from midnight tonight.

[Mohan Mathew A]

Crude price has reduced significantly recently. So there should be a good reduction today. Having said that since the last hike happened on the 5th i am not sure if it will be revised today

[saurabhkum]

They will not like to change it till the time old notes are being accepted at petrol pumps.

[CarguyNish]

Originally Posted by Mohan Mathew A

Crude price has reduced significantly recently. So there should be a good reduction today. Having said that since the last hike happened on the 5th i am not sure if it will be revised today

Yes that's true & I am expecting price cut of around ₹2-2.5, even if it happens.

Originally Posted by saurabhkum

They will not like to change it till the time old notes are being accepted at petrol pumps.

The old Notes acceptance has been extended till 24th November. But this(Price cut) is unlikely to affect that. Since the Petroleum Business involes high exchange of Currencies (100/500/1000), Government decided to include it to ease the pressure on Banks & Post Offices.

[sanjaykk]

Petrol price cut by Rs 1.46 a litre, Diesel by Rs 1.53 per litre with effect from mid-night tonight.

[JD1]

Originally Posted by CarguyNish

The old Notes acceptance has been extended till 24th November. But this(Price cut) is unlikely to affect that. Since the Petroleum Business involes high exchange of Currencies (100/500/1000), Government decided to include it to ease the pressure on Banks & Post Offices.

Not only that, this could have also impacted transport industry and raised inflation/impact on food and other stock availability due to shortage of cash for filling diesel.

[sgiitk]

Originally Posted by JD1

Not only that, this could have also impacted transport industry and raised inflation/impact on food and other stock availability due to shortage of cash for filling diesel.

I just cannot understand why bigger truckers do not use fleet cards. Improves accounting and reduces the risk of robbery. I think they work almost totally in the parallel economy, so have no sympathy from honest taxpayers.

Yesterday, I heard one chap saying that his business is down by about 70%.

[ptaneja]

Any guesses for price revision coming up this month end ? With dollar creeping toward 70rs, but crude dropping , any wise comments ?? !!

[dass]

The Rupee is sliding, the dollar is climbing. However, with people a little emotional with whole demonetization activity, I feel the prices wouldn't be changed this time and the next time there might be a marginal reduction before a new year gift of a price increase.

There is no economics in the price corrections anymore, it is all emotional, sentimental and politics. Damn, this looks like a rant already, should we have a thread for rants on fuel prices as well?