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Hike in VAT = no fuel

For 24 hours, from Thursday midnight to Friday midnight, around 400 petrol and diesel fuel stations in the city will shut shop.

delhi Updated: Apr 08, 2010 23:50 IST
HT Correspondent

For 24 hours, from Thursday midnight to Friday midnight, around 400 petrol and diesel fuel stations in the city will shut shop.

This is in protest against the state government's decision to raise the Value Added Tax on diesel to 20 per cent — a hike of 7.5 per cent since 2008.

On Thursday evening the managing committee of the Delhi Petrol Dealers Association (DPDA), which controls the 400 privately owned fuel stations, decided to go on strike.

“The increase in the VAT charges on diesel has made fuel costlier in Delhi by around Rs 4 per litre compared to Gurgaon and Faridabad in Haryana. Customers are preferring to buy fuel in those cities than here,” DPDA president Atul Peshawaria said.

He said due to the VAT hike, the sale of diesel in Delhi will come down from 8.5 crore litre per month (March 31, 2010 figure) to 3 crore litre per month.

“This translates into a fall of up to 80 per cent in the sale of the fuel in Delhi,” claimed Peshawaria. He said the state government would also lose revenue worth Rs 325 crore per annum because of this.

Springing into action to reduce the strike's impact on consumers, the Union Petroleum and Natural Gas Minister Murli Deora in a statement said: “21 fuel stations, owned and operated by (government-run) oil companies, would stay open round-the-clock on Friday, with additional tank lorries on stand-by mode.”

Deora appealed to the association not to undertake the strike as it would “inconvenience the public” and assured to “resolve the issue/s through dialogue and discussion”.

Peshawaria said the association's managing committee, after debating “hotly” the Delhi government proposal to examine the issue within a month, decided to go ahead with the strike since the government didn't offer any “concrete solution”.

He said, "Nothing has come out from our discussions with the government over this issue that began in 2008 when Haryana had reduced VAT on diesel to 8.8 per cent from 12 per cent thereby making it cheaper there than in Delhi that charged 12.5 per cent then."

The petrol pump association has warned of an increase in inflation due to this.