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Can BMC help cut fuel prices?

The soaring prices of petrol and diesel has got the Brihanmumbai Municipal Corporation wondering if it can bring prices down by cutting octroi rates.

mumbai Updated: May 22, 2011 00:48 IST
Sayli Udas Mankikar

The soaring prices of petrol and diesel has got the Brihanmumbai Municipal Corporation wondering if it can bring prices down by cutting octroi rates.

A meeting chaired by standing committee chairman Rahul Shewale was held on Saturday to check the feasibility of the move. Currently, BMC charges 3.15% octroi on crude oil and its byproducts including petrol and diesel.

The meeting comes two days after the Thane municipal body cleared a proposal to slash octroi on petrol and diesel, and is being sent to the urban development department for approval.

“In the case of Mumbai, the rate is only for crude oil and is not applied separately on petrol and diesel like in the case of Thane. So, if we decide to cut the rate, we are looking at a loss of at least Rs 500 crore, which is more than we can bear,” Shewale said, after the meeting. He said there was some re-thinking being done to see how this could be worked out; a meeting on this is scheduled for Monday.

Usually octroi is fixed by the state government between a maximum and minimum rate that municipal corporations can charge, but in case they want to slash the rate below the minimum, an amendment has to be made by the state government under the Bombay provincial act.

“In the case of Thane, the rate is 4.25% and the minimum rate is 4, and as they want to reduce the rate further, they need to approach the government. The limit is 3% for Mumbai,” a senior government official said.

Minister of state of urban development Bhaskar Jadhav said they had not yet received any proposal from Thane, but termed it a political gimmick by the Shiv Sena.

“The Sena is misguiding people. The octroi is fixed at a certain rate by the central government and it cannot go below that. By saying they have sent a proposal to us, they are only misguiding the public. It is a political stunt to please voters for the 2012 municipal elections,” Jadhav said.