Jio-BP To Give Monthly Rent To Dealers, Offer Compensation For COCO, CODO & DODO

Photo by Jon Tyson on Unsplash

Jio-BP, a joint venture of Reliance Industries and a BP-led fuel retail venture, has started offering a compensation plan for dealers, beginning June 1. Under this plan, the dealers will be supported through a monthly rental scheme for the next 4 months.

Currently, almost 1,400 fuel retail outlets are a part of Jio-BP. 

The Rescue Plan

Besides giving them the next 4 months’ rent,  the dealers would also get 10% of the diesel supply of the average sales of October, November, and December 2021. 

The dealers added that the company is working out separate plans for dealer outlets across its three formats- COCO (company-owned-company-operated), DODO (dealer-owned-dealer-operated), and CODO (company-owned-dealer-operated).

The effort is a step taken towards avoiding shutting down the retail outlets as had happened in 2008. RIL had compensated dealers when retail outlets were shut in 2008 due to high crude oil prices and a lack of support from the government. It offered Rs.500/kilolitre as an additional margin on diesel and Rs.400/kilolitre additional margin on petrol for the outlets that opted to continue operations. 

Turning the clock forward, Reliance nearly halved fuel supply to its dealers on March 16, owing to losses of Rs.10-12/litre daily on the sale of diesel. RIL has still not resumed fuel supplies to the full extent. 

Since February 2022, the company has incurred losses worth Rs.1500 Cr in fuel retailing as pump prices are not being revised as per the increase in international prices of crude oil and finished products. 

Even at the revised prices of petrol and diesel being sold at a premium of Rs.3/ litre, the company would be incurring losses. We wonder how it will shape up for the oil giants.

Too long? Here’s a one-liner: Jio-BP to give the next 4 months’ rent to dealers, slash diesel supply to 10%, and offer separate compensation for COCO, CODO, and DODO.

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