#bulk diesel delivery #fuel delivery #onsite diesel delivery Fuel dealers pick holes in start-up model | TNN | Updated: Jun 22, 2017, 02.53 AM IST Executives from state-run fuel retailers also appeared to have been caught off-guard by the start-up model NEW DELHI: Petroleum dealers pointed out several grey areas in the business model of the Bengaluru start-up that made news on Wednesday by launching 'home delivery' of #mobile diesel delivery diesel, even as senior oil ministry officials said they were not aware of any such service being provided by fuel retailers. The first question that dealers raised was the start-up's source of diesel. Dealers contacted by TOI said they get Rs 1.38 as commission on each litre of diesel. So the total commission on a 950-litre bowser being used by the start-up will be Rs 1,311. "Assuming that some dealer is splitting this commission even equally, that leaves Rs 655 for the start-up. If you then adjust 0.75% handling loss -- due to evaporation during delivery and quantity of fuel that sticks to the tanker's innards -- and cost of running the tanker as well as paying the driver, where is the profit coming from," All India Petroleum Dealers Association president Ajay Bansal said. Bansal claimed that running a tanker of 950 litres for even 10-15 km will cost Rs 300-400 and it is "extremely unlikely" that any dealer will split commission so much since "running a petrol pump these days is expensive." "We assume that consumers are not paying more than the prevalent fuel price. It is not logical when they themselves can simply drive to the pump for a refill. In our opinion, the only way the numbers can add up is if diesel is being sourced from neighbouring states where it is cheaper," Bansal said. Bansal also raised the "possibility of gaming the market" in the present system of daily price revision.
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