News Release Details

IndianOil on Revision in Dealers’ Margin w.e.f. 1.8.2017
New Delhi   03-Aug-2017

•   The Dealers’ margin for Petrol and Diesel has been revised w.e.f. 1.8.2017. The increase in dealers’ margin is in slabs with respect to volume and the category of the dealer (A & B site retail outlets, or petrol pumps). It is approx. 9% to 43% in MS and 11% to 59% in HSD.

•   Dealers’ margin is normally revised at periodic intervals in order to account for increase/decrease in
    o   Operating costs such as wages, electricity, etc.
    o  Cost of working capital
    o   Business return to the dealer
    o   Return on investment in fixed assets by the dealer
    o   Cost of product losses

Dealers’ margin was last revised on 31.3.2017.

•   As a major part of the current revision, Central Minimum Wageshave been introduced for employees working at the petrol pumps, which areapprox. 50% higher,in lieu of State Minimum Wages. The oil industry has approx. 9 lakh customer attendants working at petrol pumps, who will be benefited by this.

•   Dealers have also been instructed to ensure that all employees at theirpetrol pumps are covered under Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana.

•   Considering the hardship of ROs selling less than 170 kl per month, largely in low-potential sectors like rural and remote areas, special care has been taken to alleviate the same with slab-wise business return. This will improve service levels at the petrol pumps in far-flung areas.

•   Return on Net Fixed Assets (NFA) for Dealers was last revised 20 years back. A study was conducted thru IIM-Bangalore and, on the basis of their recommendations, the NFA component in dealers’ margin has been revised. This gives them reasonable compensation on investments made in the petrol pump.

•   Special emphasis has been given to improve customer service to ensure that
    o   Quality &quantity is fully assured to customers at the petrol pump
    o   Utmost priority is given to to maintenance & cleanliness