Reliance Industries Ltd (RIL) and BP PLC, which operates more than 1,400 fuel retail outlets with the Jio-BP brand name, compiling compensation plans for dealers to prevent closure, said three dealers who know the discussion.
On March 16, Ril almost reduced half of the fuel supply to his dealer due to losses of RS 10-12 per liter every day due to diesel sales. The company has not continued to fully inventory fuel.
To avoid turning off retail outlets, Ril is pondering several options to compensate for us. This can be in the form of financial support, payment of overhead costs to a certain extent or change the supply of fuel further, “said Dealer from Bihar with the condition of anonymity.
In his income statement on May 6, Ril said that the retail price of gasoline and diesel had not increased in line with the increase in international prices, which had caused repetitions below February 22 for the entire fuel retail industry, including the Jio-BP joint venture.
Current loss
Under the repetition has a negative impact both on existing operations and tastes to invest in this sector,” he said.
Ril in 2008 decided to compensate to dealers when the company closed retail outlets because of high crude oil prices and lack of support from the government, not like that for their public sector partners.
The company then offers to provide additional margin ₹ 500 per kiloliter to diesel and RS 400 per kiloliter additional margin in gasoline for outlets that choose to continue the operation. Outlets that decide to stop the sale of fuel are given a return of 12.5% for the capital used by them in preparing outlets.
We have been given to understand by company officials that to avoid turning off the outlet, the compensation plan is being worked on. Although the fuel supply has not been continued and our pump dries for almost three four days a week, if there is compensation to meet the cost of overhead, it will Being a big support, “said a fuel dealer from Gujarat.
Gasoline and diesel prices increased 14 times in the March 22 to April 6 period after that there was no increase. The price of fuel does not increase between November 2021 and March this year when crude oil is $ 83 per barrel. Brent Crude touched the highest $ 139 per barrel on March 7. On Thursday, Brent Crude was traded around $ 106.26 per barrel.
Officials from oil marketing companies said they are currently suffering losses up to RS 10 per liter of gasoline and Hospital 20 per liter diesel.
Joint Finance Head Ril V Srikanth said, in a post-revenue presentation on May 6, that the company maximized diesel over the flight turbine fuel (ATF) for a better economy. Reducing diesel imports by Europe from Russia and low global inventory will support margin, he said.
According to Motilal Oswal’s domestic broker, transportation fuel margin is in the 24-36 quarter with a sustainable recovery of demand and a low inventory margin to increase 17-72% in the March quarter. Among the transportation fuel, margins for gasoline (gasoline) rose 17%, diesel by 71% and ATF was 10% higher in a quarter-quarter.