Ludhiana: Petrol pump dealers decry steep increase in user fee
Previously, the user fee for petrol pumps was ₹75 per year, ₹350 for five years, and ₹750 for ten years; however, these charges have now been significantly increased to ₹3,000 to ₹10,000 per year varying with the size and location of petrol pumps
Petrol pump dealers in Ludhiana have raised concerns over the steep hike in user fee imposed by the public works department (PWD), calling it unfair and financially unsustainable. They argue that the responsibility of these payments lies with oil marketing companies (OMCs) such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum, which issue no objection certificates (NOCs) and lease agreements for petrol pump sites.
Previously, the user fee for petrol pumps was ₹75 per year, ₹350 for five years, and ₹750 for ten years. However, these charges have now been significantly increased to ₹3,000 to ₹10,000 per year varying with the size and location of petrol pumps.
In an email to the Punjab Roads and Bridges Development Board (PRBDB) on January 21, dealers highlighted their concerns about land approvals for petrol pumps. They informed the PRBDB, which oversees road access, maintains approach roads, and regulates entry and exit points for petrol pumps, that private individuals applying for dealerships do not interact directly with the PWD or any other government authority for approvals. Instead, all necessary permissions are obtained by OMC’s before dealerships are awarded under Section 144 of the Petroleum Rules, 2002.
“When we apply for a dealership, we pay a licence fee to the OMCs, not to PWD. It is the OMCs that secure NOCs and make agreements with the government. Our role begins only after all permissions are granted,” explained Manjeet Singh, general secretary of the Petrol Pump Dealers Association, Punjab.
The dealers questioned as to why they should bear the financial burden of user fee when OMCs already collect various charges during the licencing process. They also criticised the lack of a clear rationale behind the fee hike, stating that it does not consider factors such as market classification, road type, dealership turnover, or right of way (ROW) requirements.
“In some cases, the new user fee is higher than the dealer’s annual profit, making it impossible to sustain operations,” said Raj Kumar, petrol pump owner near Samrala Chowk.
However, Pradeep, an XEN from PWD, asserted, “The recent hike in the user fee has been revised by the state government. Moreover, the issue is between the OMCs and the petrol pump operators. We are serving them notices to clear these outstanding dues as they are using our infrastructure to operate.”
Paramjit Singh Doaba, president of the Petrol Pump Dealers Association, Punjab, said, “We held a meeting with PWD officials in December, where we made it clear that OMCs should be responsible for these payments. We also urged a fair reassessment of the fee structure.”
In a recent meeting with CM Bhagwant Mann on March 17, they reiterated their demand for regulatory clarity and relief from unfair charges. Dealers further urged the state government to address the issue related to OMCs and establish a centralised collection system, similar to VAT, where fee is directly collected from oil companies. They have also called for clear directives to ensure that government agencies coordinate with OMCs instead of placing unnecessary financial pressure on individual dealers.