Petrol & Diesel Prices Likely To Drop In Multiple States Amid OMCs Like HPCL & BPCL Raise Dealer Commissions

On the auspicious occasion of Dhanteras, Oil Marketing Companies (OMCs) made an announcement that brought relief to consumers and cheer to petrol pump dealers nationwide. On Tuesday, October 29, OMCs confirmed an increase in the Dealer Commission payable to petrol pump operators, a move that will not only benefit dealers but also result in reduced petrol and diesel prices in various parts of India. Additionally, companies plan to rationalize inter-state freight charges, which will lower prices in remote areas far from fuel depots.

Leading the announcement, the Indian Oil Corporation (IOC) confirmed that the revised dealer commission rates would be effective starting October 30, 2024. In an official post on X, IOC shared, "Indian Oil is pleased to announce a revision in dealer margins following the resolution of pending litigation. This change will not affect the retail selling price of products but will further strengthen our commitment to enhancing customer service standards and the welfare of staff employed at retail outlets."

The revised commission will directly support petrol pump dealers by ensuring fair compensation while also benefiting consumers with price adjustments. "Our endeavour to provide affordable petrol and diesel across the country on a sustained basis has come to fruition with this decision," IOC added. The rationalization of intra-state freight charges will help bring down the price differences within various markets in a state, although the adjustments will be deferred in regions where the Model Code of Conduct is active.

As a result of these adjustments, several states, including Odisha, Chhattisgarh, and Himachal Pradesh, will witness a reduction in petrol and diesel prices. For instance, remote locations in Odisha, such as Kunanpally and Kalimela in Malkangiri, will see petrol prices drop by Rs 4.69 and Rs 4.55 per litre, respectively, with similar reductions for diesel by Rs 4.45 and Rs 4.32. Similarly, in Chhattisgarh's Sukma, petrol prices will be slashed by Rs 2.09, and diesel by Rs 2.02 per litre. Further price cuts will also apply in districts like Bijapur, Bailadila, Kateykalyan, Bacheli, and Dantewada. Other states, including Arunachal Pradesh, Uttarakhand, Mizoram, and additional areas within Himachal Pradesh, are also expected to benefit.

Currently, dealers receive a commission of Rs 1,868.14 per kilolitre on petrol sales, along with 0.875% of the product billable price. Diesel commissions stand at Rs 1,389.35 per kilolitre, plus 0.28% of the product billable price. Revised commissions are expected to better align with market demands.

Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, welcomed the OMCs' decision. Taking to X, he expressed, "I welcome the announcement by OMCs to increase the Dealer Commission payable to petrol pump dealers & the decision to undertake intra-state freight rationalization to benefit consumers in remote areas. This will lead to a decrease in petrol and diesel prices in several parts of the country."

Puri highlighted that the commission revision was long overdue and would significantly impact both consumers and fuel operators. "The dealer commission increase will provide better services to approximately 7 crore citizens who visit our fuel retail outlets in the country every day, without increasing fuel prices," Puri emphasized. He also acknowledged that this commission adjustment would directly benefit around 10 lakh employees working at over 83,000 fuel outlets nationwide.

The increase in dealer commissions is expected to strengthen service quality across the country, allowing petrol pump operators to enhance their offerings to consumers.

Additionally, while the price reduction will impact remote areas the most, the government and OMCs' joint effort is expected to maintain steady fuel prices in urban centres while ensuring smoother logistics and fairer pricing structures across state lines.