Indian Oil Corp, BPCL, HPCL: Oil marketing companies' stocks in focus today due to this key move

The move is expected to benefit consumers residing in the far-flung areas of the country, as the prices of petrol and diesel are likely to register a considerable drop.

However, there will be no change in retail petrol and diesel prices.

“#IndianOil is pleased to announce a revision in the dealer margins (effective from 30th October 2024), following the resolution of a pending litigation. This will have no additional impact on the retail selling price of products. This will further strengthen our collective resolve in enhancing customer service standards and the welfare of staff employed in retail outlets,” Indian Oil Corp Ltd wrote on X on Tuesday.

Dealer commissions would vary according to sale and place. Details were, however, not immediately available.

At present, dealers are paid ₹1,868.14 per kilolitre, plus 0.875% of the produce billable price as commission on petrol. The same on diesel is ₹1,389.35 per kilolitre, plus 0.28% of the product billable price. This will further enhance customer service standards and the welfare of staff employed in retail outlets, it said.

“Further, demonstrating the core value of Nation First, our endeavour to provide affordable petrol and diesel across the length and breadth of the country on a sustained basis has come to fruition. #IndianOil has undertaken intrastate rationalisation of freight, which will reduce variation of retail selling price of products across various markets within a state, except in geographies where a Model Code of Conduct is in place. Happy festivities!” Indian Oil added.

Meanwhile, Union Minister for Petroleum and Natural Gas Hardeep Singh Puri welcomed the announcement, saying it is a Dhanteras gift for the people.

"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," the minister added. 

"This revision comes after seven years and eight months. We welcome it," he said, adding that the dealers have withdrawn a legal case they had filed against the oil companies over oil companies enforcing marketing discipline guidelines.

The dealer commission revision has happened following the withdrawal of the court cases.

Commenting on the move, Mukesh Kumar Surana, former CEO of HPCL, in an interview to CNBC TV-18, said, "There could be a very minor impact on prices depending on the zones and areas. OMCs will have to take a very nominal hit depending on the zone."

Surana explained that an equalised freight is decided at the terminal after charging refinery transfer pricing. 

Surana further said that remote locations have higher freight rates, which leads to different pricing in different zones.