K'taka fuel dealers oppose move to open new ROs

  • | Friday | 7th December, 2018

On the contrary the move would destroy jobs as many petrol pumps would shut as demand would fall further,” said a retail dealer. BENGALURU: The Centre’s move to open new petrol retail outlets (RO) has received a backlash from petrol pump owners in Karnataka , who rue that the expansion of ROs would destroy their business.A delegation of petrol pump owners on Friday called on chief minister H D Kumaraswamy and urged him to stop new ROs from coming up in the state.“We requested the CM to prevail upon the Centre to drop the proposal of opening new petrol pumps. While the average sales recorded in 2012 was 170 kilo litres per petrol pump, it has reduced to 120 kilo litres in 2018.“The reduction in demand is due to various reasons including the entry of private players who have over 9,000 out lets. And more ROs would add to the sluggishness,” said Gowda.While it takes around Rs 16 crore to set up a petrol pump in urban areas and a minimum of Rs 4 crore in rural areas, the owners would get commission Rs 3.19 per litre of petrol and Rs 2.30 for a litre diesel and the business would be unviable if more petrol pumps are added.“The Centre is saying that the new ROs would create jobs. He responded positively and assured of doing the needful,” said K M Basave Gowda, president of Akhila Karnataka Federation of Petroleum Traders (AKFPT).The state-run oil marketing companies (OMC) have decided to open 65,000 ROs cumulatively and called for applications from the owners to set up the same.The move has surprised the market as there are 54,000 petrol pumps across India and the new ROs would only add to the clutter while the demand is steadily declining.In Karnataka, there are 4,000 petrol pumps and the new proposal would add 5,300 to the existing lot.The petrol pump owners are particularly restive about the declining demand over the years.

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