New Delhi: After the Delhi government put its foot down and refused to reduce value-added tax on diesel and petrol, around 400 petrol pumps in Delhi that also sell Compressed Natural Gas (CNG) declared a 23-hour-long strike on October 22. Delhi Petrol Dealer’s Association announced the shutdown on October 10 — days after 13 states slashed VAT following a request by Finance Minister Arun Jaitley.
Dealers said customers were heading to nearby states for cheaper fuel
Explaining the rationale behind the strike, the Delhi Petrol Dealer’s Association said that customers were flocking to buy petrol and diesel from neighbouring states Uttar Pradesh and Haryana as the fuel cost is cheaper there. Nischal Singhania, president of the association, said, “The price reduction in UP and Haryana has led to a decline in the sale of petrol by 20 percent and diesel by 30 percent in Delhi till October 15. It is expected to further decline in the coming days.” On Sunday, petrol price in Delhi was slashed by 25 paise and came down to Rs 81.74 per litre. Diesel was sold at 17 paise less — at Rs 75.19 per litre. Across other major metros, petrol was priced at Rs 87.21 per litre in Mumbai, Rs 83.58 in Kolkata and Rs 84.96 in Chennai.
In an attempt to provide relief to consumers, the Centre had slashed fuel prices on October 4 by Rs 2.50 and the states were asked to match the cut. The cut was effected through a slash of Rs 1.50 per litre in excise duty, while oil marketing companies absorbed the rest. A VAT cut meant the states would have to bear a cut of Rs 2.50 for each litre of petrol sold. After the Centre's request, BJP-ruled Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Chhattisgarh, Assam, Uttarakhand, Himachal Pradesh, Tripura and others, announced price cuts. Kejriwal tweeted that while the Modi government had increased the excise duty on fuel by Rs. 10, it reduced the cost just Rs 2.50 on Sunday. “It is a sham. The Centre should have at least reduced prices by Rs 10 per litre,” he said on Twitter. Kerala — another opposition-ruled state — said there would be tax cuts only if fuel prices were brought down to the level that was when Modi assumed office in May 2014.
(PSU Watch- India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)