Why does everyone want a petrol pump? All you have to do is pay Rs 1,000 as application fee, pull strings (if you aren’t lucky), appear for the interview and then count the cash: an average profit of Rs 50,000 per month. A majority of the pumps that have gone to the BJP, its friends and family, are what is called Company-owned Dealer-Operated pumps. The company refers to either IOC, Hindustan Petroleum, Bharat Petroleum and IBP. Here’s the economics of the scam: • Once you are cleared by the Dealer Selection Board, you get a Letter of Intent (LoI) from the company. • The company, meanwhile, is doing the dirty job, setting up the pump: Rs 60 lakh-Rs 1 crore for buying/leasing the land, earthfilling, boundary wall and cabin, getting you the power connection, sinking tubewells, building approach driveway, fixing tanks and dispensing pumps, putting up billboards. • Once the pump is ready, you take the LoI to the company which gives you a Letter of Agreement. You can take this to the bank and get a loan for purchasing stocks. Within 24 hrs of the payment, stocks arrive and your pump is up and running. • What you get: A commission of Rs 613 for 1,000 litres of petrol sold; Rs 365 for the same volume of diesel. You have to pay a licence fee of Rs 43 per kilolitre of petrol sold and Rs 36 for diesel. • Your expenses: electricity, telephone, receipt books, employees’ salaries. (Though minimum wages range between Rs 2,200-2,500 per month, most employees are hired for less on temporary basis). The company pays for your attendants’ uniforms and upto 80 per cent of the cost of the generator you install for power backup. • What you make: The minimum potential sales at which a pump is erected is 100 kilolitre. And the net profit is estimated at Rs 15,000 per month. However, the average sale at a pump is usually 250 kilolitre at which net is around Rs 50,000. Of course, you can make more on the side by tinkering with the meter, mixing stuff in the petrol or those little tricks that every self-respecting attendant knows. • The bottom-line: an average income of Rs 50,000 a month means Rs 6 lakh a year, all pumps are given for 15 years (with an option for renewal) which means Rs 90 lakh. Multiply this by over 2,000, the number of allotments made. Go figure it out.
