Lok Sabha Question No. 2181 (UNSTARRED), answered on 2021-08-02
Subject: Expenses on Petrol Pumps
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Dileshwar Kamait, Jyotirmay Singh Mahato

## LOK SABHA UNSTARRED QUESTION NO.2181 TO BE ANSWERED ON 2 nd  AUGUST, 2021

## Expenses on Petrol Pumps

## †2181.      SHRI DILESHWAR KAMAIT: SHRI JYOTIRMAY SINGH MAHATO:

## पेोलयम एवं ाक ृतक गैस मंी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) the conditions under which the expenses are made on Petrol pumps by BPCL under DL-CC-LFR;
- (b)  whether these expenses are collected through instalments from the pump dealers and if so, the Act under which the same is done;
- (c) the manner in which these instalments are fixed;
- (d)  whether  any  agreement is signed between the company and the pump dealer for this expense;
- (e)  whether  the  pump  dealer  can  have  E.M.  Lock,  tank  lorry,  VSAT  at  their  own expense; and
- (f) if not, the reasons therefor and if so, the details thereof?

## ANSWER

पेोलयम और ाक ृतक गैस मंालय म राय मंी ( ी रामेवर तेल )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI RAMESWAR TELI)

(a)  to  (d)        Bharat  Petroleum  Corporation Limited  has  informed that various types of assets are being provided to the Retail Outlet (RO) dealers by Public Sector OMCs for which a recovery is being made in the form of License Fee Recovery (LFR) or Service Station  License  Fee  (SSLF).  This  LFR  is  irrespective  of  the  investment  made  in  a particular outlet and is levied on per KL sales of the RO. Average investment in assets provided by the Public Sector OMCs is reckoned for arriving the Single Recovery Rate per KL which is applicable separately for products (MS & HSD), depending upon the type of Retail Outlets i.e. Company Controlled 'CC/A' site & Dealer Controlled 'DC/B' site on pan India basis.

The  investment  in  the  Company  Controlled  (CC)  sites  is  higher  as  the  OMCs  are providing land and infrastructure along with equipment  like Dispensing  pumps, underground product storage tanks etc. However, in the Dealer Controlled (DC) sites, the  investment  of  OMCs  is  limited  to  provision  of  equipment  like  Dispensing  pumps, underground  product  tanks  etc,.  LFR  applicable  for  Company  controlled  and  Dealer controlled sites is thus different.

The  dealer's  obligation  to  pay  LFR/SSLF  is  included  as  one  of  the  clauses  in  the standard Dealership Agreement.

(e) to (f)   EM locks are provided by the Public Sector OMCs as it is a critical component of security locking arrangement of a Tank lorry delivering product at Dealer's premises. EM  locks  are  integrated  with  the  software  and  central  server  to  grant  OTP  based authorization  at  customer  premises  upon  arrival.  Thus  EM  locking  system  has  an interface with Public Sector OMCs Vehicle tracking system and ERP system which is utilized for ensuring secured delivery of petroleum products to customer premises.

The  VSAT  at  RO  is  also  provided  by  Public  Sector  OMCs.  The  VSAT  cannot  be provided  directly  by  the  dealer  at  his  expense  as  centralized  procurement  by  OMCs ensures  the  required  licensing,  technical  specifications  for  sustained  real  time  data transfer to OMCs  server with desired cyber security customized as per the operational/system requirements.

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