Flexible pricing of fuel, which was introduced in Goa on June 16, has turned out to be nightmarish for petrol pump dealers as several of them have already suffered huge losses.
the goan I networkrPANAJIr rEver since June 16, prices of diesel and petrol are changing daily in Goa like that in the rest of the country. In an ideal world this shouldn’t be a problem, but prices have mostly remained on a downward trajectory, which means that dealers on most days sold fuel at a lesser price than they had bought it. rParesh Joshi, president, Goa Petrol Dealers Association (GPDA), said, “Prices of diesel and petrol fell sharply between June 16 and June 30. Due to this, in June alone, I suffered a loss of Rs 53,000 on account of my petrol pump in Vasco.” rOther petrol dealers in the state corroborated this. In fact, few petrol dealers even said that they are sitting on losses running into lakhs. rA petrol dealer, on condition of anonymity, said, “Suppose I have 20,000 litres each of petrol and diesel. A Re 1 decrease in price of petrol and diesel would mean that I would incur Rs 40,000 loss on sale on that day itself.” rThis shows the magnitude of problem particularly when petrol dealers work on wafer thin margins. Oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) have implemented a flexible price regime in the country. rDue to this, price of petrol and diesel change everyday now. This was done to ensure that fluctuation in fuel prices in India mirror fluctuations in oil prices worldwide. Earlier, fuel prices used to change on the first and sixteenth of every month in Goa. rThe crux of the matter is that dealers are badly exposed to fluctuations in oil prices now, which can take a huge toll on their working capital and also on profit margins. Theoretically, if prices move down, they can rise upwards too. rBut, as long as prices continue to remain falling, dealers would always be forced to sell at a lesser price than they buy. Moreover, dealers may not be in position to keep on incurring losses. Seeing losses piling up, even banks may refuse to provide them with working capital loans. rr Dealers claim losses running into lakhs of rupees due to flexi pricingr May not be in position to keep on incurring lossesr With losses piling, banks may even refuse to provide them with working capital loansr Price of petrol & diesel mostly remained on downward trend since June 16r Earlier, fuel prices used to change on the first and sixteenth of every month in Goa
