BPCL revises commission for its retail dealers

BPCL CMD D Rajkumar made this announcement here stating that the upward revision is meant to address the needs of all stakeholders. The July 31 revision which came into effect from August 1, 2017, has had a positive impact on the dealer fraternity, he said, adding after initial apprehensions, over 95 per cent of its dealers had given positive signals for the commission revision. 

There are 55,000 oil retail outlets across the country, of which close to 14,000 belonged to BPCL. In Tamil Nadu, of the 4,500-plus outlets, the oil company’s share constituted 1,300-odd. 

BPCL has been focusing on improving efficiencies which could get reflected in its sales and as part of revising the return on fixed assets (NFA) for dealers, it had commissioned a study by IIM-Bangalore. Based on the recommendation of the premier institute, BPCL took this step that involves increase in compensation depending on the investments made in the petrol bunk.

“We have taken a professional approach on the whole issue. Considering the fixed operating costs plus the variable costs, in terms of product losses and working capital needs, the dealers have been handsomely rewarded as this would result in a 20 to 50 per cent revision over what they used to get prior to the revision,” Rajkumar said, adding the delivery boys in the forecourt were the ones to derive maximum benefit. As many as 10 lakh families would gain owing to this revision. 

This also mandated that dealers provide clean toilets, upkeep and ensure transparency in quality and quantity of fuel dispensed to customers. The dealers were also directed to provide cover to their employees under the ‘Pradhan Mantri Suraksha Bima Yojana’ and ‘Pradhan Mantri Jeevan Jyoti Bima Yojana,’ as part of the social security measures undertaken by BPCL. Also, given the increasing thrust on digital adoption, the latest move of BPCL would mean the dealers mandated to remit directly the wages of the employees through the e-payment mode. The employees at petrol bunks were covered under the Central Minimum Wages and the latest revision would certainly work in favour of all stakeholders, he said, claiming that the step would “dis-incentivise” those indulging in unfair trade practices. 

BPCL would initially absorb the “marginal” impact of about Rs 50 crore to Rs 70 crore due to the revision. “Apart from a motivated workforce in the forecourt, we will absorb the impact and later, take a call based on international crude oil prices so that the customer is not inconvenienced,” Rajkumar said. 

To a query on daily pricing mechanism, the CMD said since its introduction from June 17, the fuel price had shown a maximum increase by 18 paise while reduction was 27 paise a litre. The data shows it to be a successful initiative and unlike the midnight price revision, the 6 am change proved to be far more acceptable.

BPCL is experimenting with two cargo consignments of crude of 1 million barrel each of heavy and high Sulphur content; light and low Sulphur, as part of tapping diversified sources available to the oil company. “Our imports are refined at our refineries in the existing configuration,” the CMD said, noting the company was among the first to process over 55 types of crude varieties. He also dwelled on the five-year plan wherein Rs 1 lakh cr has been allotted for expansion activities, spanning refining, marketing and other new initiatives. Eyeing a market cap of Rs 2.50 lakh crore by 2021, BPCL has also ventured into gas business by bagging city gas distribution rights for ten cities of the 15 CGD projects assigned to it.