RIL dealers take protest to DAKC

MUMBAI: Reliance Industries’ contract with their petrol pump franchises is completely one-sided, the company’s franchisees camping outside the group’s office at the Dhirubhai Ambani Knowledge City (DAKC) said on Thursday.

The franchises, who have invested amounts varying from Rs 25 lakh to Rs 3.5 crore in the petrol pumps over the past three years, say they were assured sustainable returns by the company when they signed up.

Reliance currently sells fuel at Rs 2.50 per litre more than the public sector companies, a development which has caused a sudden drop in business for the franchises.

“Several dealers have sunk in all their money in the petrol pumps and are now finding themselves in a very difficult situation,” says CK Ayyapan Nair, joint secretary of the All India Reliance Petrol Dealers Association. The agreement between Reliance and the franchises violates fundamental rights, he said.

In the case of dealer-owned and operated outlets, the franchises had to develop the outlet and lease it to
RIL for 20 years at the cost of Re 1 per month, he said.

The dealers met with the company management on Thursday and have decided to negotiate on further compensation to reduce their losses. According to an RIL statement, over 750 dealers, representing in excess of 90% of Reliance Industries’ petroleum dealers have already reaffirmed their faith and commitment in the approach taken by RIL and have expressed their support to work with the company in a constructive and collaborative manner.

The company further said, only a few dealers and their representatives chose to adopt a confrontationist approach. RIL representatives met these dealers and explained that the root cause of the problem was the lack of level playing field and that RIL is doing everything possible to find a long-term solution to the problem.

To part-compensate the losses incurred due to absence of a level playing field, Reliance Industries (RIL) increased the price of diesel by Rs 2.50 per litre over the rates offered by PSUs, who enjoy subsidy benefits. Despite this differential in price, RIL is incurring substantial losses in retail marketing.