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Petrol, diesel prices gone up: Here's why it will cost more from today

  • The All India Petroleum Dealers Association has demanded this hike in prices
  • The price hike is because of the dealer commission and it will be applicable from August 1
  • Dealer associations have not been very happy about the daily price changes
pay more for Petrol diesel from today

While we are still coming to terms with the daily price change in the fuel, there is a new charge upon the customers. According to a report in the Financial Express, consumers will have to pay more for petrol and diesel starting August 1.

The hike is being attributed to the dealer commission the oil marketing companies pay to the pump owners. This commission is part of what we pay the pumps and is currently Rs 2.55 per litre for petrol and Rs 1.65 per litre for diesel. The All India Petroleum Dealers Association have been demanding for a Rs 1 per litre hike for petrol and Rs 0.72 litre for diesel. The hike has been confirmed by Ajay Bansal, the president of the All India Petroleum Dealers Association.

Bansal told Financial Express that dealers were claiming that the commission at present was too low to cover expenses and make a profit. "The national average sale per outlet is 170 kilolitres of fuel every month. Assuming this sale, a dealer makes only 14 paise per litre which converts to around Rs 25,000 of profit per month," he said.

Ever since the daily revision of petrol and diesel prices have been brought in, the dealers have been an unhappy lot. In June when this move was announced, a lot of the dealer associations had threatened a strike and it was called off only when the Union government assured an increase in dealer commission soon. This increase in dealer commission was set to happen in July but had been put off till August.

Under the present dynamic fuel pricing state-run fuel retailers revise rates on the 1st and 16th of every month, based on average international price in the preceding fortnight and the currency exchange rate. The prices of petrol and diesel are being revised daily. The intention was to benefit the customers. But now dealers are complaining that their profit margins are reducing.

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