Question : Expenses on Petrol Pumps

(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?

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.
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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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