Truckers northern hunt for cheaper fuel

Many Truckers also replace existing tanks with larger ones as customers demand a better deal.

Petrol pumps in northern States have turned meeting grounds for the Truckers fraternity as they stand in serpentine queues to fill fuel-tanks to the brim. Many of them have replaced their standard tanks and attached larger capacity ones to make sure their vehicles can hold as much fuel as possible while they criss-across the country.

Truckers and their great northern hunt for cheaper fuel

This love for North India has got nothing to do with State loyalties of the drivers. These are just quirky consumer behaviour in response to frequent fluctuations and high differentials in fuel pricing across States. Even logistic players crib that their clients have lately started pressing for freight contracts that bill them by bench-marking fuel rates to prices prevailing in the North. For instance, a litre of diesel in Delhi on Tuesday was cheaper by about ₹10 compared to Mumbai, where it was priced at ₹77 per litre.

“To deal with the daily fluctuation in fuel prices, trucks plying across longer distances try to fill their tanks in the North as against in western States,” Pirojshaw Sarkari, CEO, Mahindra Logistics, told Business Line.

However, he added that this is not entirely possible given the limited size of the fuel tanks.

The corporate customers — who have freight rate contracts with Mahindra Logistics linked to fuel prices — now want their contracts to be linked to prices in the ‘cheaper’ States. “If the customer is from the North, and he has to send cargo to the West, he insists on linking the freight rates to the fuel prices in the North. However, fuel can’t last the entire journey and trucks have to be refuelled mid-way,” Sarkari explained.

Practice widespread

Truckers across several States are strategising to choose the low-cost location to fill their tanks. About a fifth of the total trucks in the country are able to load their fuel tank up in cheapest destinations, according to the Indian Foundation of Transport Research and Training (IFTRT), a transport tracking body. IFTRT also confirmed the preference for larger tanks.

“For instance, many trucks that have a 300-litre fuel tank have replaced it with 500-litre tank,” said SP Singh, Senior Fellow, IFTRT. Of the 47-50 lakh trucks, about 10 lakh trucks journey across the country and another 12 lakh travel a distance of about 300 km (to the neighbouring States). It’s not the Truckers and the logistics industry alone that are engaged in such meticulous planning to rationalise fuel costs. Starting June 2018, Indian Railways has also adopted a similar strategy.

In June, it grouped its fuel depots, based on per litre prices, into four categories based on the then prevailing prices — cheapest (₹64 or less), moderate (₹64-65), costly (₹65-66) and costliest (above ₹ 66).

Locomotives are trying to maximise fuelling from rail consumer depots (RCDs) that offer an attractive value proposition. All the zones have been advised to strategise on fuelling and re-fuelling for passenger and freight trains at the cheapest RCDs to the extent possible, according to the Railway Ministry.

SOURCE: https://goo.gl/h9dYbr