Fuel dealers to strike if commission not hiked to 7.5% by 30 Sep

The Bangladesh Petroleum Dealers, Distribution, Agents, and Petrol Pump Owners Association has threatened to go on strike if their demand for a hike in their commission to 7.5% from 4.68% of the retail prices of fuel oils – petrol, octane, and diesel – is not met by 30 September.

During a press briefing held at the Bangladesh Petroleum Corporation (BPC) headquarters on Sunday, the association's President Nazmul Haque said, "Our demand is 7.50%, and there is room for negotiation. The Minister of State for Power and Energy has pledged a resolution by 30 September, and we are awaiting that."

Dealers have been urging the state-owned BPC to increase their commission saying that their operational costs have increased.

"Until 2013, we used to have a percentage commission on fuel sales. However, the government fixed the commission for each litre of fuel sold in that year. So, day by day the cost of business increased but the income did not increase as much. We have to count our losses," explained Nazmul

The commission that the dealers have demanded, however, far exceeds what dealers receive in neighbouring India. Currently, dealers in Bangladesh receive Tk4.68 and Tk4.82 in commission on the sale of one litre of petrol and octane, respectively, and Tk2.73 for diesel. In India, the commission is approximately 3.9% for petrol and 2.9% for diesel, similar to what dealers in Bangladesh receive as a percentage of the retail price.

Professor M Shamsul Alam, energy adviser of the Consumers Association of Bangladesh (CAB), however, told The Business Standard, "Let them [dealers] present their case before the Energy Regulatory Commission and demonstrate where they are incurring losses.

"If they find it impossible to operate at the current rates, it might be better for them to surrender their licences. The government can then open tenders and potentially involve foreign companies in running petrol pumps if needed. The government cannot tolerate attempts to raise funds at the expense of the public."

Meanwhile, a segment of petroleum dealers launched a strike nationwide on Sunday, demanding a 7.50% commission. Later in the evening, they withdrew the strike. 

During Sunday's press briefing, Anupam Barua, director of the BPC, explained that the petrol pump owners association has been expressing concerns about financial losses due to rising costs for some time. 

"We asked petrol pump owners to specify where they were facing high costs, but they did not provide a response. Therefore, we were forced to select 11 sectors of expenditure and submit a report to the ministry. Additionally, a committee is currently in discussions with dealer representatives."

Anupam also noted that the energy state minister had given the dealers ample time for dialogue, which is why the sudden strike came as a surprise. However, he assured that those on strike still have an opportunity to engage in negotiations.

The petrol pump owners association has three main demands, with two of them already resolved. The remaining demands include exempting VAT on commission agents and tank-lorry rentals and issuing separate notifications in this regard alongside issuing a notification to extend the economic life of tanks from 25 years to 50 years.

As per the August 2022 notification by the Power, Energy, and Mineral Resources Division, dealers receive Tk0.80 per litre for transportation costs, Tk0.08 for depreciation costs, Tk2.73 per litre for diesel, Tk1.58 for kerosene, Tk4.82 for octane, and Tk4.68 for petrol.

At the press conference, Nazmul highlighted that not all petrol pumps across the country are closed. But, labour strikes at the Narayanganj depot under the BPC have halted oil transportation since Sunday morning, leading to the current crisis.

Anupam Barua said, "We have informed the deputy commissioner of Narayanganj, and we have also requested increased security at other depots across the country."

Three state-owned companies under BPC – Padma, Meghna, and Jamuna – regularly supply fuel oil to government-approved distributors. These distributors then sell diesel, petrol, and octane to customers through their own petrol pumps.