Petrol pumps in Delhi on strike demanding VAT cut

New Delhi: Petrol pumps across the national capital were shut on Monday in protest against the Delhi government’s refusal to cut sales tax (VAT) on petrol and diesel.

But for a dozen company-owned-company-operated petrol pumps in the city, all pumps refused fuel, sending motorists running low on fuel and scrambling for alternate refuels.

“All 400 petrol pumps and linked CNG pumps shut operations from 6.00 am Monday and will remain closed till 5 am tomorrow (Tuesday),” said Delhi Petrol Dealers Association (DPDA) President Nishcal Singhania.

Pump operators, however, refuelled emergency service vehicles like ambulances and government vehicles so as to ensure essential services are not hit, he said.

Long queues were witnessed at COCO outlets that were the only lifeline for motorists in the national capital.

DPDA said the Union government with effect from October 5 slashed prices of petrol and diesel by Rs 2.50 by way of a cut in excise duty and asking state-owned oil firms to bear subsidy. This was matched by several states by reducing value-added tax (VAT).

Haryana and Uttar Pradesh (UP), which border the national capital, have reduced VAT, he said. “But Delhi government refused to reduce VAT on petrol and diesel, resulting in fuels becoming more expensive than bordering Haryana and UP.” 

Petrol in Delhi Monday was priced at Rs 81.44 per litre after a 30 paise cut in rates. Diesel is being sold at Rs 74.92 a litre, down 27 paise over the previous day.

Petrol is priced at Rs 80.14 a litre in Gurugram, Rs 79.02 in Noida, Rs 78.87 in Ghaziabad and Rs 80.39 in Faridabad – the cities which share borders with the national capital.

Diesel in Gurugram is priced at Rs 73.78 per litre, at Rs 73.02 in Noida, Rs 72.88 in Ghaziabad and Rs 74.01 in Faridabad.

Cheaper petrol and diesel in UP and Haryana has resulted in motorists, particularly truckers, refuelling in these states rather than in the national capital.

“Because of the high price in Delhi and low prices in states like UP and Haryana, customers are deserting the petrol pumps in Delhi, leading to a huge drop in sales,” he said.

Singhania said the purpose of the day-long strike was to invite the attention of the Delhi government towards the issue and the Association will decide on the next course of action depending on the response of the government.

Following the October 5 price cut, Haryana and UP were among various other states that reduced VAT on petrol and diesel.

DPDA asked the Delhi government to immediately follow leads of other states and reduce VAT on petrol and diesel to encourage commuters to buy Euro-VI grade fuel.

After the Centre cut excise duty by Rs 1.50 per litre and asked PSU oil firms to subsidise fuel by Re 1, Maharashtra and Gujarat governments were among the first to announce a matching Rs 2.50 cut.

They were later joined by Chhattisgarh, Jharkhand, Tripura, UP, Madhya Pradesh, Himachal Pradesh, Haryana, Assam, Uttarakhand, Goa, Arunachal Pradesh and Bihar with similar moves. Jammu and Kashmir, which is under the governor’s rule, too reduced the tax on the two fuels.

Maharashtra, however, reduced VAT only on petrol and not on diesel.

Even before the excise duty cut, Rajasthan, West Bengal, Karnataka, Kerala and Andhra Pradesh last month reduced VAT to cushion consumers for a spate of price hikes.

Delhi government has however till date not cut VAT on either of the fuels.