With the need to save money on expenditure like transportation to balance the household budget, here are a few observations on the subject—which can actually be tried out. But we, the users, have to take the first step—the seller would rather prefer the status quo
I’ll begin with two interesting episodes at fuel filling stations recently, coupled with a set of numbers:
1) A regular customer, car-owner, using the filling station for decades and known to the owner, was getting extremely angry about the price of fuel and taking it out on the owner's rep despite all protests that they were only dispensing fuel—they were not responsible for the prices. The issue was actually also about minor cheating in volume dispensed as perceived.
2) A two-wheeler rider getting air filled up in his motorcycle tyres was carrying his own pressure gauge, and after getting his tyres pressed up, came to the office and told them that their gauges were off by over 10%, showing more pressure. He claimed that this was being done at all filling stations to increase fuel consumption in the face of dropping sales.
The biker made another interesting point—his cost of fuel and operations including insurance, parking, and other running costs per day were now between Rs140 and Rs170 for a usage of about 80 kilometres daily. And it was rising as his bike was now out of warranty and parking rates had been hiked recently too. His cost of ownership, on the other hand, was almost down to nil because the bike was about 3 years old and almost paid up—but while he had been paying for it, the cost was also about Rs150 per day. As the bike grew older, it would make more sense for him to reduce usage, and use public transport—which was coming to about Rs50-Rs60 per day. And save the bike for a down payment on a Tata Nano, which he would then use only for family purposes—out of the bike’s ‘non-usage’ savings.
The math was a bit convoluted, because it also included some amount of reimbursable office work, but his calculations were that the reimbursements were not worth it any more because they also took 3 months to reach him. It was better to use public transport and present daily vouchers on actuals, and try to catch up on work in the Metro or bus—work which was mainly on telephone and SMS. Of course, this is in Delhi/NCR, where public transport has advanced by leaps and bounds over the last few years. Sure, buses, local trains, EMUs and metro trains are still packed to overflowing during office hours, but things appear to be getting better every day.
Back to the interactions. In both cases, there was much anger, much shouting, and eventually much hot air, with no cogent solution. For the retail outlets, it is simple—the customer has to go somewhere, and it evens out. For the oil companies, it is simple—targets for increasing sales have been set and need to be achieved by any means fair or foul. But the customer, the actual private consumer, is beginning to show signs of revolting.
One, the usage of public transport is going up, and not just the 2-million people per day on the Delhi Metro as well as the half-a-million on buses, but also on short-distance hops by autos and taxis. Next, they are not taking things like quality and quantity issues lying down, and as for the less air pressure scam—it is well-known already, most regular riders and drivers overfill to compensate based on visual and kick on the tyre methods. And thirdly, a drop in liquid fuel sales are now a cause for concern at filling stations in and around Delhi/NCR—the attached shop often is the mainstay of profits.
More importantly, even in social groups where cost of living is not such a big issue, the cost of basic transportation is now increasingly a point being discussed. Real estate costs are viewed as investments, food and education are necessary expenditures, but transportation is now viewed as a hole in the pocket which needs to be plugged. Rapidly. By any means whatsoever. Which probably explains why so many automobile manufactures are providing special deals on "free fuel", with the purchase of a new car or bike.
However, back to the basics, you and me and the retail outlet. Where, in all likelihood, will lie most of the solutions.
In both cases, after the episodes, I asked around, talked with people at the filling stations, and truth is always over a cup of tea—both the customers were correct. There has been an increase in attempts by the oil industry to apparently try to get retailers to sell more, especially in the Delhi/NCR area where the Delhi Metro is viewed almost as Oil Company Enemy Number One, and somehow gets people to consume or pay for more liquid fuels. Downstream, how it translates into reality at the filling station, is where the front-end is facing the ire of customers.
Forcing customers to buy "premium" fuels, for example, is one time-honoured tactic. The Indian Oil CoCo I often use has simply stopped keeping "ordinary" diesel at most times, for example. The under-filling of air into tyres is frankly a new one on me, but now that it is out in the open, appears to make sense—10% less air in tyres can easily mean about 15%-20% more in terms of running costs—not just fuel but also lubricants and earlier engine repairs as well as faster wear-and-tear of tyres. And hanky-panky on quantity as well as quality is as old as the hills.
So what can be done to, at the end of the day, help customers and consumers save money and at the same time ensure that the retailer does not go out of business or change his line of business, or face the increased ire of his bread-and-butter supplying user?
Seeing we are just over the Diwali season, when all of us prayed to Lakshmi in all her aspects of wealth, any suggestion, request or solution needs to be as inclusive as possible. This, therefore, needs to work for the customer, consumer, retailer as well as oil company. It simply won't be sustainable otherwise. Yes, it may be bad news for those who make their livelihood out of each stage in the transaction—from purveyors of high-sulphur motor spirit made in ancient refineries and not used anywhere else in the developed world to the traders in between and the whole great chain of entities for whom a consistent growth in consumption of petroleum products, the higher the cost the better, spells not just survival but further power, down to the end of the food chain.
For sure, the liquid fuel industry does not want to see what happened to the iron ore industry happen to them, but then again, it will be for the consumers and customers who pay who may need to demand solutions.
1) The traditional oil companies in India need to start thinking as energy companies, and not a second too late, rapidly. So, whether it is Indian Energy Corporation, Bharat Energy Corporation, Hindustan Energy Corporation or Indo-Burma Energy, the petroleum or oil part needs to be put aside. Even the Ministry needs to be renamed. Obviously, this is not going to happen in a hurry, because the existing inertia levels are going to ensure that India's dependence on expensive imported liquid petroleum products and crude need to continue as long as possible, but we can try to change things.
Question: How can consumers and customers drive this change? Simple, by making it clear to the retailers that they will not accept these backdoor methods of paying for increasing consumption any more. To start with, ensure that air pressure in tyres is always a notch over the stated levels, and keep your own pressure gauges to re-check this—and make a protest if there is a flaw. Next, be more proactive on double-checking quality and quantity of fuel dispensed—here again, feedback is that hardly anybody ever stops to do so. These two small but significant steps will in their own way start getting the message back to the powers that be that yes, the consumer is not taking these tactics lying down any more.
2) An important part of a visit to a filling station in the old days used to be the regular servicing of a car or bike. Typically, service intervals used to be 1,000 miles/1,600 kilometres or a month, the main reason being that engine oil technology about 30-40 years ago had not reached the point where service intervals could be longer. Today, most vehicles are good for 10,000 km or a year for oil change and service interval, and some high usage buses and trucks can go as much as 50,000 kilometres without needing an oil change or service. But in all cases, one thing that has not changed is the amount of dust and other particles in the air—if anything, it has gone up. And what that means is that the air filter in our cars and bikes ideally still require monthly or even more frequent cleaning.
Unfortunately, we tend to ignore this because it is hidden away somewhere in the fine print of the owner's manual, and so for most of the year we keep driving with increasingly choked air filters—which in turn increases fuel consumption. Cleaning an air filter is relatively simple, all you do is click open the cover, and run a reverse compressed air flush through it for a few seconds, and then put it back in. It is all there, explained in the book, but it does not suit anybody else but you who pays for the fuel to ensure this is done at least once a month. Start now, and insist that the filling station, where you will get compressed air, does it when you go to fill air in your tyres. This simple step alone can do wonders for the fuel economy of your vehicle. It will also get a message across to the oil companies.
3) If you drive upcountry, you will note that especially in the hilly areas, a complete support industry has come up near filling stations. Much of this is in the co-linked field of automobile repairs, but interestingly, of late, one can spot a lot of home gadget repair shops also, handling electrical and mechanical repairs. It is here that you can pick up and install some wonder low- or no-friction bearings for your ceiling fans, for example, as well as for your automobiles, at costs well below what they are in bigger cities. Asking around, I was shown by one such shop the complete catalogue of all the automobile spares I could ask for, for any vehicle, make, model, available on his computer—some available off the shelf and the rest on order, delivered from Bangkok or somewhere similar with no questions asked in 72 hours or under.
But along with these automobile spares, they also organised delivery as well as installation of energy saving and renewable energy solutions of the solar and mini-hydel sort, especially LED lights of all sorts. To them, the coexistence with the filling station was more than it being a catchment area for customers—they perceived that they were now ahead in terms of leading and cutting edge technologies in the field of energy. For example, as they pointed out to me, their back-up inverters were linked to solar panels through the controller, but the filling station was still using diesel for gen-sets. The question arises—why can't the oil companies themselves take the lead here, and sell the same energy saving and renewable energy devices from their own locations?
4) If you are looking for a replacement car or bike which operates on any petroleum based fuel, liquid or gas, start letting the managers and owners of filling stations know that you are now seriously looking at battery operated options. Under the present dispensation, it will have to be a very brave or forward thinking filling station owner or operator who will have any good things to say about battery operated vehicles—some of us will recall the serious opposition from the same oil companies against CNG cars at one stage not too long ago.
But if the oil companies had any sense, they would embrace this wave towards battery operated cars and bikes with both hands, as opportunity instead of adversary. As it is, the battery replacement business for "normal" vehicles has moved out of the hands of filling stations towards the open market, now if the filling stations which can support every other element of battery vehicles do not take the opportunity to provide battery after sales and service, then they will have only themselves to blame. A set of batteries is a one-time expense, there are so many options—lease-rental, outright sale, rejuvenate, import and even get into manufacturing them.
On Diwali, it is all about inviting Lakshmi in, and maybe we need to do our loyal and faithful friends at the filling stations a favour —by telling them, that if they don't look at changing with the times, then maybe they aren't really recognising Lakshmi. And in the bargain, if we benefit, then that's really the whole idea of spreading the wealth, right?