Govt to probe increase in retail petrol outlets

New Delhi, Apr 27 (UNI) With the peformance of Oil Marketing Firms (OMCs) coming in under scathing attack, the government has decided to go in for a detailed probe on the rapid increase in retail outlets (ROs) commissioned by the OMCs.

Besides increased expenditure for operating retail outlets, the reduction in volume has considerably eroded the viability of pump operation leading to increasing incidence of sickness besides providing a fertile ground for increased resort to malpractices like adulteration by some pump operators, an officia statement said.

This further results in the quality of service to the customers going down in the ROs. In fact, the Federation of All India Petroleum Traders (FAIPT) has been representing to the Government against this indiscriminate expansion by OMCs and complained about increasing non-viability of their operations.

The declining performance of OMCs has come in for criticism from different quarters including by several Parliamentary Committees.

The government has decided to undertake a scientific and rational study of the rapid increase in the retail outlets (ROs) commissioned by the public sector oil marketing companies (OMCs) in the last few years.

The OMCs have been strictly advised to undertake the survey immediately and identify the retail outlets selling less than 200 KL per month and to come out with a blue print for the remedial measures to ensure a healthy retail network of OMC ROs providing standard service to the customers. This exercise is expected to be completed within the next four months.

The rapid expansion of the number of retail outlets from 18848 as on April 2002 to 29951 as on MArch 2006 an increase of 59 per cent in just four years is said to have lead to a drastic reduction in the average throughput per RO. It had taken OMCs over 30 years to set up 18848 ROs.

The per RO volume which was a healthy 275 KL per month five years ago has declined to half of this to less than 140 KL per month now.

Besides increased expenditure for operating retail outlets, the reduction in volume has considerably eroded the viability of pump operation leading to increasing incidence of sickness besides providing a fertile ground for increased resort to malpractices like adulteration by some pump operators.

This further results in the quality of service to the customers going down in the ROs. In fact, the Federation of All India Petroleum Traders (FAIPT) has been representing to the Government against this indiscriminate expansion by OMCs and complained about increasing non-viability of their operations. The declining performance of OMCs has come in for criticism from different quarters including by several Parliamentary Committees.

There is also a concern that the OMCs have been engaged in unhealthy competition among themselves while the private sector, who entered the market just a few years ago, appears to have been able to wean away a large section of OMC customers and corner a huge market share.

UNI RT ARB GC2103