NO NEW RETAIL OUTLETS OF OIL COMPANIES.
MANGALORE -- No new retail petrol outlets will come up in Karnataka state for now. This follows the Karnataka high court directing the three major oil marketing companies (OMCs) - IOC, BPCL and HP --- not to open new retail outlets till the petition filed by the Karnataka State Petroleum Dealers Welfare Association is disposed of.
The association filed a PIL after OMCs kept calling for dealership despite the oil ministry's December 3, 2012 order that no retail outlets should be announced or set up till such time the ministry arrives at a policy and parameters based on volume, distance and other norms. The ministry letter states: Henceforth, OMCs will not invest in opening new retail outlets and the investment is to be made by prospective dealers only. OMCs may specify suitable standards of service/safety of retail outlets and make them operational through a suitable retail outlet scheme and all future outlets should be automated.
Members of Dakshina Kannada and Udupi Petroleum Dealers Association alleged that OMCs while inviting applications from prospective dealers painted a rosy picture about the profits. "We would like to reiterate that the existing dealers are all for public sector OMCs for expansion of dealer network wherever it is justified as per the norms of the ministry,'' said association president Sujeerguthu Aithappa Alva.
Members Satish N kamath and KV Shenoy said that they have suggested to OMCs to strengthen the existing network and be economically viable. "Opening retail outlets in rural areas will cost the prospective dealer at least Rs 40-50 lakh and in excess of Rs 1 crore in urban areas. The automation cost of an outlet will exceed Rs 1.5 crore,'' the members said.
They claimed that many bunks in rural areas were shutting down due to issues like lack of staff, pilferage by tankers staff, evaporation losses, high cost of power and backup facility and lack of sale volumes. The districts of Udupi and DK have more than 300 retail outlets and about six have shut down due to lack of sales volumes, said Kamath.