Nearly all petrol pumps in Delhi shut shop today to protest the increase in VAT on diesel that has made the fuel costlier in the national capital compared to neighbouring Haryana, the pump dealers union claimed.
"Out of 410 petrol pumps in Delhi, only 18 outlets owned and operated by oil companies are functioning. The rest shut operations for 24 hours at 0600 hours today," Delhi and NCR Petrol Dealers Association President Ajay Bansal told PTI.
An Indian Oil official said eight company owned and company operated outlets of BPCL and five each of IOC and HPCL were operating.
After the day long token protest today, the pump dealers said they will shut shop every Monday till their demand for lowering VAT on diesel is met and even threatened to go on an indefinite strike.
"Sale is drying up as differential in diesel price in Delhi and Haryana is almost Rs 4 per litre. We (union) are under pressure from dealers to go on an indefinite strike and we will have to consider this option if our demands are not met," he said.
In June 2008, Haryana reduced VAT on diesel to 8.8 per cent from 12 per cent, thereby making it cheaper than Delhi where VAT on fuel was 12.5 per cent.
"From 13.5 crore litres a month, the sales of diesel in Delhi came down to 8.5 crore litres a month (loss of 37 per cent)," he said.
Already "bleeding" dealers were further dealt a body blow when the Delhi Government from April 1 raised VAT on diesel to 20 per cent.
"This has resulted in a difference of almost Rs 4 per litre in the price of diesel between Delhi and Haryana," Bansal said.
Delhi is bordered on all sides, but East, by Haryana.
The increase in VAT has made diesel in Delhi more expensive than even Uttar Pradesh, which is east of Delhi. Large number of vehicles coming into the national capital from Haryana or UP daily prefer refueling outside.
"Due to this price differential, we expect a further drop in sale from the present 8.5 crore litre per month to three crore litre per month (total loss of 80 per cent)," he said. "As a result the state is going to suffer heavy revenue losses to the tune of Rs 325 crore per annum."
The Association claimed that the differential price would also encourage smuggling and black marketing of cheaper low grade diesel into Delhi which from April 1 has moved to Euro-IV compliant fuel.
"The unviable petrol dealers will have to resort to cost cutting for survival," the union said, listing steps like reducing manpower and reduced working hours.