In response to recent speculation about fuel price reductions, the Consortium of Indian Petroleum Dealers has penned a letter to the Indian government, urging a phased approach to reduce petrol and diesel prices. The association expressed concerns over substantial financial setbacks faced by dealers during previous sudden price cuts.
The government had previously reduced excise duty on petrol and diesel in November 2021 and May 2022 to alleviate the burden on consumers grappling with high fuel prices. However, the abrupt nature of these reductions negatively impacted the viability and sustainability of petrol dealers.
The letter, addressed to the Office of the Prime Minister, proposes a gradual reduction, suggesting a daily decrease of 50 paise. The aim is to enable dealers to adapt to changes more effectively, minimizing financial losses and ensuring the continuity of their businesses.
Uday Lodh, President of the Consortium of Indian Petroleum Dealers, emphasized the necessity of anticipatory actions due to direct government announcements affecting the dealers. The association, comprising over 3,000 dealers across 8 states, has yet to receive a response from the government.
In a parallel communication to Oil Marketing Companies (OMCs), the association requested reimbursement for losses incurred beyond the net dealer margin due to reductions. They also called for an end to forceful sales strategies, citing potential financial losses during aggressive sales tactics.
Despite corrections in crude oil prices since April 2022, Indian fuel retailers, including Indian Oil Corporation Ltd (IOCL), BPCL, and HPCL, have maintained unchanged retail fuel prices. OMCs typically revise petrol and diesel prices daily based on the rolling average of international benchmark prices over the past 15 days.
