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Delhi petrol dealers say their sales have decreased by 50% as people refuel vehicles in neighbouring states, asks Arvind Kejriwal to cut VAT

Anurag Narain, President of the Delhi-Petrol Dealers Association, has written a letter to Delhi Chief Minister Arvind Kejriwal asking to cut Value Added Tax (VAT) on petrol and diesel.

As the Delhi government, along with several non-NDA state governments, refuse to cut VAT on petrol and diesel, it is not just the residents of the national capital, but the fuel dealers are also having to pay the price. According to dealers, their sales have gone down by almost half as people are refuelling their vehicles in neighbouring states like Haryana and Uttar Pradesh, where the state governments have cut VAT after the central govt slashed excise duty on Petrol and Diesel.

Anurag Narain, President of the Delhi-Petrol Dealers Association, has written a letter to Delhi Chief Minister Arvind Kejriwal asking to cut Value Added Tax (VAT) on petrol and diesel. Narain wrote that petrol in Delhi is costlier by ₹9 and diesel by ₹2 compared to nearby states, their sales have come down substantially. “Higher VAT in Delhi will have a negative impact resulting in insurmountable loss of sales of petrol pumps of Delhi and revenue to our state,” he wrote in the letter. Narain further added that reduction in VAT will boost sales and might prevent financial crisis.

As of today, petrol price in Delhi is ₹104 per litre, while the same is around ₹95 in Noida and ₹96 in Gurugram.

Anurag Narain also pointed out that the AAP government may face political consequences of not cutting fuel prices like many other states have done. “We request Delhi govt to decrease VAT, which might help during elections. Then our sales won’t go to other states; sales here have decreased by 50%,” he wrote in the letter.

The letter wrote to Delhi CM also highlighted that VAT on fuel have gone up in the state in recent years. According to Narain, the VAT on petrol in Delhi has gone up from 20% in 2014 to 30% in 2020, and the same on diesel has increased from 12.50% to 16.75% un the same period.

Narain informed that petrol sales in Delhi have come down from a monthly average of 11 crore litres in 2014 to 8 crore litres, and diesel sales have come down from 13 crore litres in 2014 to just over 5 crore litres at present. He added during the same period, sales in Delhi’s neighbouring states have grown by “double percentage figures”. Amid the rising fuel prices, last week the central govt had cut excise duty on petrol by ₹5 and diesel by ₹10, and had urged the state governments to cut VAT on fuel. Accordingly, all NDA-ruled and some non-NDA ruled states have cut VAT to further bring down prices. BJP governments in Haryana and Uttar Pradesh had reduced VAT which had meant that there was a total ₹12 reduction in the prices of petrol and diesel.

 

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