Guj petrol pumps to enforce one paisa hike on petrol, diesel

Ahmedabad, Nov 26 (UNI) The Federation of Gujarat Petroleum Dealer's Association (FGPDA) here today decided to enforce an unilateral token ''one paisa hike'' on petrol and diesel to protest against the Centre's unwillingness to raise the profit margins for the petrol pumps.

Addressing mediapersons here, FGPDA President Kiranbhai P Patel said that since last two years, the dealers have been demanding a hike in their margin which is merely 1.75 per cent. Evaporation losses, which is to the extent of 0.75 per cent in case of petrol and 0.2 per cent in case of diesel, further reduces the margin, Mr Patel said while claiming that fourteen petrol pumps in Gujarat have closed down as the business has become financially unviable.

''By increasing the prices by one paisa unilaterally, we will be breaking the law and would be liable to a fine of Rs 25,000 or our pumps can be suspended for 15 days,'' Mr Patel admitted. ''If such action is taken against us, we will all shut our operations,'' Mr Patel threatened.

''We are only asking for a reasonable profit margin,'' he said.

The same government oil companies are giving 5-8 per cent profit margin to their pumps in Sri Lanka while our margin stagnates at 1.75 per cent which means we get only 40 paise as profit, Mr Patel said.

Citing a joint study by the IIM Ahmedabad and Dehra Dun-based Indian Institute of Petroleum, which was instituted at the behest of the Union Petroleum Ministry, Mr Patel informed that the study has suggested a certain margin. If recommendations of the report are not implemented, then we will enforce it on our own from January 1 next year, Mr Patel said, adding the FGPDA also proposes to move the High Court in this regard.

''The administered price mechanism (APM) ended in 2002, yet the dealers of the PSU oil companies are not free to sell the product at 'a reasonable' margin while Reliance and Essar petrol pumps are fixing their rates. Why is not free trade being allowed?'' Mr Suneet Bagai of the Rajasthan Petroleum Dealers Association asked.

Mr Bagai claimed that with rising competition and increasing overheads, it has become difficult for the petrol pumps to even break even.

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