Checked against the Marketing Discipline Guidelines 2024 (Ver. 1, effective 24.10.2024) on 15 October 2026. Published by MDG Services on 29 October 2026.
Two rupee allowances, one method
Both are rupees per KL. MDG turns each into a percentage of the net price and takes that share of your receipts off book stock before comparing it with the dip, only where and when the allowance applies MDG 5.1.11.
| Shrinkage allowance | TVA (temperature variation allowance) | |
|---|---|---|
| Shown as | Annexure 8: a line in the price build-up | Annexure 10: a credit on each invoice |
| Applied to | All of that product received | Only litres on which the invoice allowed TVA |
| Revised | MDG does not say | Generally every quarter |
All of this is from MDG Annexure 8 and MDG Annexure 10.
From rupees to a percentage
Divide the allowance per KL by the net price per KL. The net price leaves out commission and taxes, and for shrinkage the allowance itself MDG Annexure 8 MDG Annexure 10. For example, with made-up figures:
- Shrinkage: Rs 300 on Rs 60,000 per KL is 0.50%, so 100 KL received takes 500 litres off book stock.
- TVA: Rs 165 on Rs 55,000 per KL is 0.30%, applied to the litres where the invoice allowed TVA.
Note: Annexures 8 and 10 print sample figures dated 1998 (shrinkage from 1.4.98, TVA April to June 1998), not current rates. Ask your oil company which allowance applies to you.
Annexure 9: using the percentage
In our words, the steps are below, and TVA follows the same ones MDG Annexure 9 MDG Annexure 10. The example is made up: MS with shrinkage at 0.50%.
| Step | Example |
|---|---|
| 1. Start with the opening dip stock | 18.000 KL |
| 2. Add the receipts | 90.000 KL |
| 3. Take off the shrinkage (or TVA) volume: the percentage times the receipts (for TVA, only the receipts it was allowed on) | 0.50% of 90.000 = 0.450 KL |
| 4. Take off the sales as per meter. That leaves the closing stock in the books | Sales 100.200 KL, so 18.000 + 90.000 - 0.450 - 100.200 = 7.350 KL |
| 5. Compare it with the closing dip: the book figure should fall within plus or minus 4% of the dip figure | Dip 7.200 KL, so the range is 6.912 to 7.488 KL: inside |
The example leaves out handling loss, because Annexure 9 has no step for it MDG 5.1.11. Ask your oil company how its officer adds it. See also stock variation, the calculator and positive vs negative.
What MDG does not say
- Where the shrinkage figure appears. TVA is on the invoice, but for shrinkage the annexure shows only a price build-up. Ask your oil company.
- Which annexure is meant. Annexure 9 points to "Annexure I" for the percentage. Annexure 1 is the density record, and the shrinkage method is in Annexure 8 MDG Annexure 9.
Questions dealers ask
01What is shrinkage allowance at a petrol pump?
A rupee allowance per KL for shrinkage losses, turned into a percentage of the net price and applied to all of that product received MDG 5.1.11 MDG Annexure 8.
02What is TVA at a petrol pump, and how is its loss worked out?
A rupee allowance per KL for temperature losses, given as an invoice credit. Divide it by the net price per KL and apply the percentage only to litres where the invoice allowed TVA MDG Annexure 10.
03Does every petrol pump get shrinkage allowance and TVA, including for petrol (MS)?
No. They count only where and when they apply MDG 5.1.11. Each product has its own allowance, and one can have none MDG Annexure 8 MDG Annexure 10.
04Are the Annexure 8 and Annexure 10 figures the current rates?
No. Both are sample calculations dated 1998 MDG Annexure 8 MDG Annexure 10. Ask your oil company which allowance applies to you.
Read the official text: Marketing Discipline Guidelines 2024 (PDF on Bharat Petroleum's website) (also published on iocl.com).
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