Petrol pump operators have formally requested the Oil Ministry to review and revise dealer margins paid by oil marketing companies (OMCs). According to reports from The Hindu BusinessLine, Federation of All India Petroleum Traders (FATPT) President Ashok Badhwar sent a letter to Oil Secretary Neeraj Mittal seeking immediate intervention. Badhwar urged the ministry to ensure petroleum dealers receive fair reimbursement of legitimate operating costs and reasonable return on capital to maintain uninterrupted service delivery.
As reported by The Hindu BusinessLine, Monty Sehgal, FAIPT's national spokesperson, highlighted that fuel price increases since 2020 have drastically increased input costs while inflation components are being ignored by OMCs. Petroleum dealers are working under immense financial stress due to increased inventory costs and squeezing volumes. For a standard retail outlet selling 170 kilo litres per month, the net business return is only around ₹37,500 per month after meeting operational costs, while more than 80% of retail outlets operate at sales of less than 100 KL per month.
According to the report, dealer margins were last increased in 2017 with some riders, followed by a marginal increase in October 2024 after settlement of the Marketing Discipline Guidelines (MDG). Badhwar noted that the meagre dealer margin hike granted after a gap of seven years ignored the Inflation Index, with market conditions changing drastically between 2018 and 2024. He expressed disappointment that subsequent dealer margin hikes have not been implemented at regular intervals as assured during the MDG settlement.
As reported by The Hindu BusinessLine, Badhwar requested an updated uniform remuneration of ₹2 lakh per month to ensure financial stability and dignity commensurate with current investments. He pointed out that various state governments have revised wages since the last dealer margin hike, which need to be incorporated to arrive at fair wage components considering three-shift operations. Staff salary has become the single largest expenditure item in retail outlet administration, with the current margins inadequate for more than single-shift operations under the New Labour Code.
