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Petrol Pump Owners Seek Removal of VAT, Revision of Dealers’ Margins: Rally for ‘One Nation, One Tax’

Published: August 24, 2023

Petrol pump dealers from across the country have written to the Ministry of Petroleum, Government of India to increase dealers’ margins on petrol and diesel sales, since it has been six years since the last revision was done. They have also sought immediate removal of the old VAT and urged for replacing this with the GST. The dealers associations are seeking migration of petroleum products to the new GST regime, in keeping with Prime Minister Narendra Modi’s vision of One Nation One Tax.

Petrol pump dealers associations from many states at a demonstration at Jantar Mantar in New Delhi

Representatives of many state dealers associations submitted a memorandum to the Government of India saying that the last revisions in the margins given to dealers were done six years ago in 2017. India has over 70,000 petrol pumps, which directly and indirectly provide livelihood to over 10 Lakh people and this “continued denial of revision of margins by oil marketing companies” has led to severe financial crunch and hardships.

Petroleum dealers from Uttar Pradesh, Haryana, Punjab, Rajasthan, Gujarat, Andhra Pradesh, Himachal Pradesh, Jammu & Kashmir, Bihar and Madhya Pradesh came together in support of a joint call given by Petroleum Dealers’ Welfare Association Haryana and others.

“Petrol stations earn by the margins given by oil marketing companies or the OMCs. Since 2017 when the last dealers margin revision was done, prices of petrol and diesel have gone up but the margins have remained constant. Simultaneously, expenses of the petrol pump dealers including salaries have also gone up, and so has the inflation. This has led to a lot of hardships to us,” said Sanjeev Chaudhary, President of the Petroleum Dealers Welfare Association, Haryana.

India boasts of one of the largest networks of fuel stations. “Despite the Governments emphasis on electric vehicles, it is estimated that in the foreseeable future the contributions of petrol stations will continue to grow, with the growth of the economy. In many ways, petrol pumps are the quiet bulwark of the Indian economy, fueling its growth and keeping the country rolling. No wonder, they are vital, and so are their concerns. We need fair play,” said Monty Sehgal, spokesperson of Petrol Pump Dealers Association, Punjab.

Chaudhary said that various associations have consistently been engaging with the oil marketing companies and requesting for revisions of the margins over the past six years. “Due to the restrictions during COVID pandemic, petroleum dealers suffered substantial losses, even as oil companies reaped record-breaking profits. The disparities and discrimination continue. We worked day and night to ensure that the wheels of Emergency Services keep moving during COVID19 lockdowns and restrictions, despite drastic drops in routine sales and volume resulting in huge losses.”

“Even in the current scenario, despite fluctuations in crude oil prices, the retail prices of petrol and diesel have remained unchanged since May 2022. Meanwhile, OMCs have posted significant profits in the first quarter of FY24,” added Chaudhary, who along with various petrol pump owners of Haryana joined the New Delhi demonstration.

The Associations also highlighted their concerns about many other issues faced by them. “The smaller dealers with less than 200 kilolitres throughput should get special packages from the oil companies. Also, in view of many bleeding petrol pumps it may not be appropriate on part of oil companies to consider opening new pumps, as the new advertisements indicate,” said Paramjit Singh Doaba, President, Petrol Pump Dealers Association, Punjab.

“It is becoming difficult for us to sustain ourselves with the current static margins and we feel let down by the oil marketing companies. They have remained unresponsive to our legitimate demands and are compelling us to seek recourse from the Government of India. We have tremendous faith in Hon PM and Union Petroleum Minister and appeal to them to help us,” added Doaba.

The associations have also flagged the issue of adulterated diesel. Due to the absence of any monitoring system, the bowsers are used extensively for selling chemical mixed adulterated diesel, an association member said.

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