Oil marketing companies raise dealer commissions. What it means?

Oil marketing companies on Tuesday announced an increase in dealer commissions for petrol pump dealers and will rationalise inter-state freight charges, aimed at decreasing petrol and diesel prices in several regions across the country.
“Indian Oil is pleased to announce a revision in dealer margins effective from 30th October 2024, following the resolution of a pending litigation. This change will not affect the retail selling price of products and will further strengthen our commitment to enhancing customer service standards and the welfare of staff employed at retail outlets,” Indian Oil Corporation said in a post on X (formerly Twitter).
The oil company said that it aims to provide consistent and affordable petrol and diesel prices nationwide through inter-state freight rationalisation, reducing price variations within states, except in areas under the model code of conduct.
“Demonstrating the core value of Nation First, our endeavour to provide affordable petrol and diesel across the length and breadth of country on sustained basis has come to fruition. #IndianOil has undertaken intrastate rationalisation of freight which will reduce variation of retail selling price of product across various markets within a state, except in geographies where Model Code of Conduct is in place,” IOC added in the social media post.
Union minister for petroleum and natural gas Hardeep Singh Puri welcomed the announcement by oil marketing companies.
“I welcome the announcement by OMCs to increase the Dealer Commission payable to petrol pump dealers & the decision to undertake intra-state freight rationalisation to benefit consumers located at remote locations (far from Petrol and Diesel depots of OMCs) which will result in a decrease in petrol & diesel prices in several parts of the country. (Decision in poll bound states and constituencies will be implemented later),” Puri wrote on X.
He said that the decision reflects Prime Minister Narendra Modi’s vision to bring even the most remote areas in line with the rest of the country regarding facilities for citizens, including the Northeast region, which has been connected with ‘world-class road, air, and rail infrastructure.’
“The dealer commission increase will better services to approximately 7 crore citizens who visit our fuel retail outlets in the country everyday, without increasing fuel prices,” added Puri.