It is not just the petrol price, the petrol dealers are also unhappy with the recent advertisements by oil marketing companies where they have called for more than 3,000 petrol pumps in Karnataka.
Mr Satish N. Kamath, one of the office-bearers of the Dakshina Kannada and Udupi district Petroleum Dealers' Association, said the recent decision of the oil marketing companies to open more than 3,000 petrol outlets in the State is a threat to the trade.
Explaining this, he said a pump has to handle 1.5 lakh litres a month to remain viable. Of the more than 300 petrol pumps in Dakshina Kannada district, nearly 40 per cent of them are selling less than 1.5 lakh litres a month. This has made them unviable. “The oil marketing companies that are claiming huge losses due to high crude oil prices and dollar appreciation are still venturing into setting up new outlets,” he said. The oil marketing companies have to spend around Rs 50 lakh a petrol bunk. This is apart from what a dealer spends. “While the companies are claiming huge losses, how can they spend on setting up these petrol pumps?” he asks.
Added to this, the difference in the petrol prices in different States is affecting some dealers in the border areas.
Giving the examples of Karwar in Karnataka bordering Goa and locations in Mangalore bordering Kerala, he said there is a difference of Rs 6 a litre of petrol and Rs 2 a litre of diesel in the border areas of Karwar, and Rs 4 a litre of petrol and Re 1 a litre of diesel in Mangalore-Kerala border. “While the petroleum products are cheaper in bordering States, it is costlier in Karnataka,” he said, and attributed this to higher sales tax and entry tax.
This makes the existing petrol outlets in border areas unviable. In such a situation, “how can the oil marketing companies expect anybody to set up petrol outlets in such areas”, he asks.