Dealers resent directive of Petroleum Minister

By N. Ravi Kumar

CHENNAI, OCT. 19. The petroleum trade has been caught off guard by the recent directive of the Ministry of Petroleum and Natural Gas on `re-sited retail outlets'.

At least ten outlets statewide, four of them in Chennai, are expected to fall under the purview of the order, which essentially seeks to curb dual operation by a dealer. The advice prescribes thorough verification of all records. More intriguing is the fate of about 50 retail outlets throughout the State that had `re-sited' their operations and were subsequently regularised.

Since the Ministry's advice to the national oil companies hints at reopening of the files related to the re-sitements, in the last five years, it has created resentment among the dealer community, who put the blame on the respective oil company.

The issue of re-sitement is two-pronged. The first category involves retail outlets that had ``partially re-sited'' by relocating the diesel sales operations to locations that had better sales potential. Within six months of the resitement, sale of diesel from the parent outlet had to be stopped. Re-sitement then appeared to be an attractive option towards boosting the sales for the oil industry.

The second lot relates to the alleged ``dual operations'', which in other words is running of two parallel establishments by the dealer. These cases have arisen from the anxiety of the oil industry to popularise the usage of unleaded petrol (ULP), before its usage was made mandatory. For the purpose, the oil companies permitted the re-sited diesel bunks to add ULP, as an environment friendly fuel. This worked well, until leaded petrol was phased out and ULP became the order of the day.

Laying the blame on the oil companies, trade sources say it was at the instance of the companies that the re-sitement was carried out. Of course, the re-sitement translated into healthier bottomlines for the dealers. Admitting that the ``dual operators'' were orally directed to close down one of the establishment, the sources point out that the ``arrangements amongst the oil companies'' as the main cause for the issue. After getting notices, a few dealers went to court and obtained an injunction against the `closure'.

As the re-sited bunks fetch substantial business for the oil companies and since considerable investment have been made on their development, one of the options available to the oil company now is to convert the dual-operation as a company-owned, company-operated (COCO) outlet.

Meanwhile, not less than five petrol outlets in Chennai and its neighbourhood have been allegedly found dispensing off- specification motor spirit.

The samples of the IBP outlets, that get fuel supplies from the BPCL oil terminal at Tondiarpet, allegedly failed the octane count test. IBP, which had made octane tests mandatory, has served 45-days suspension notice on the outlets. The samples were collected over a period of time, beginning from July. When contacted, IBP officials were tight-lipped and said that a report on the issue had been sent to the Ministry of Petroleum and Natural Gas.

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