In protest against Delhi Government's decision to increase VAT on diesel
NEW DELHI: Petrol pumps across the Capital, except for a few of those owned by the State-run oil marketing companies, went dry on Friday and shut shop in protest against the Sheila Dikshit Government's decision to increase the Value Added Tax (VAT) on diesel making it costlier in Delhi compared to neighbouring Haryana.
Delhi NCR Petrol Dealers' Association president Ajay Bansal said that out of 410 petrol pumps in Delhi, only 18 outlets owned and operated by the State-run oil marketing companies were functioning. The rest remained closed for the day. The strike began in the morning at 6 a.m.
Failing to get a positive response from the Delhi Government to their demand for a reduction in VAT, Mr. Bansal said the pump dealers would shut shop every Monday till their demand for lowering VAT on diesel is accepted. “We will even contemplate going on an indefinite strike if our demands are not met,” he warned.
Mr. Bansal claimed that sale of diesel was drying up as the difference in diesel prices 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. 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,” Mr. Bansal said.
The increase in VAT has made diesel in Delhi more expensive than even Uttar Pradesh. A majority of vehicles coming into the Capital from Haryana or U.P. now prefer to get their tanks filled outside. “Due to this price differential, we expect a further drop in sale from the present 8.5 crore litres per month to 3 crore litres per month. The State exchequer will also suffer a heavy revenue loss,” he added.
“The strike was a success with all the petrol pump owners keeping their filling stations closed. The Delhi Government decision to increase the VAT to 20 per cent has hit the petrol pump owners hard and they were left with no option but to go on strike,” said Delhi Petrol Dealers' Association president Atul Peshawaria.
Despite wide publicity given to the strike by petrol pump owners through banners and media reports, many Delhiites were caught unawares. “I had no knowledge about the strike. It was only on reaching the petrol pump station that I found that it was closed. With the fuel tank of my car almost empty, I have no option but to return home and take rest today,” said Somendra Rana, a resident of Rohini.
However, long queues were seen outside some petrol pumps operated by Stated-owned oil companies which stayed away from the strike.
Mr. Peshwaria said sales at most of the petrol pumps had gone up on Thursday showing that people knew about the strike. “Most people knew about the strike. Since we had withdrawn our earlier call for strike on April 9, some people expected the same this time round and suffered,” he said.
Meanwhile, Delhi Finance Minister A.K. Walia held a meeting with oil companies officials in the afternoon to discuss the issue. “Mr. Walia had a meeting with senior officials of the three oil companies on Friday. The Minister asked them to provide him with the sale figures of petrol pumps on the border areas to know the impact of the increase in tax. Later in the day, the Minister discussed the matter with Chief Minister Sheila Dikshit,” said a Delhi Government official.