Mumbai CNG dealers threaten to go on strike

CNG dealers, who had deferred their agitation plan last month, have threatened to go on strike once again as they are not satisfied with the increase in their margins and have decided to reject the proposed hike.

The association has been demanding an increase in commission from 87 paise at present to Rs2.50 per kg, but the state-level coordinator has allowed only Rs1.16 per kg.

"We had deferred our strike plan by a month in the light of receiving a written assurance from the state level coordinator that our issues with Mahanagar Gas Nigam (MGL) would be resolved. But that does not seem to have happened.

"Instead, it has now been conveyed to us that our margins will be revised only to Rs1.16 a kg from 87 paise now," Mumbai Petrol Dealers Association president Ravi Shinde said in Mumbai on Saturday.

CNG dealers in the metropolis and neighbouring Thane and Raigad regions have written to the heads of the state-owned oil marketing companies, Mahanagar Gas, transport secretary and state civil supplies secretary that they are rejecting the revised commission of Rs1.16 a kg.

"For every kg of CNG that we sell, we get only 87 paise as profit. Our overheads have gone up and we have to pay for everything from electricity to salaries, uniforms and other expenses," he said.

The current retail price is of CNG is Rs31.47 a kg.

"We are unable to understand the logic of Rs1.16 a kg margin and are aggrieved that this decision was unilaterally arrived at without taking us into confidence. We conveyed to you that our working cost of dispensing one kg of CNG comes to Rs2.10 a kg. We were open to debate this with you and Mahanagar Gas.

"Please be advised that your offer has been totally rejected by our dealers. If you wish to resolve the issue, please call a meeting within 24 hours from the receipt of this letter dated December 17, to avoid agitation that is imminent," the letter said.

In this connection, it may be recalled that early November, a meeting was held on issue of CNG dealers margins, where the state-level co-ordinator and an Indian Oil representative were present. Following this the association had decided to defer their strike plan by a month.

Retail operations at around 122 CNG retail stations in Mumbai, Thane and Raigad will shut down if the association goes ahead with  the strike.

"Only CNG retailing operations will be affected. Petrol retailing will not be affected," he said.

"Our agitation was primarily to address our margins. But it is evident that oil companies have managed to increase their license fees by more than a rupee, without paying adequate margins to CNG dealers. From January 1, oil companies' licence fee will go up to Rs2.43 per kg of CNG sold, which means that their license fees would increase by more than a rupee," he said.

Mahanagar Gas pays licence fees to oil companies in lieu of allowing the latter's pumps from where dealers retail CNG. License fees are paid by MGL to oil companies, at the rate of CNG sold per kg, whereas CNG dealers get their margins from the licence fees paid by MGL to state owned oil companies.

At present, state run oil companies get CNG supplies at Rs1.40 as licence fee from Mahanagar Gas. Out of this, CNG retailers get 87 paise, while 53 paise is retained by the oil companies.