Flip side of VAT hike, bulk diesel buyers of Punjab turn to HP and Jammu
The flip side of the increase in value added tax on petrol and diesel in Punjab is the shifting of the bulk diesel consumers to neighbouring Himachal, Jammu and Chandigarh.
Information gathered by The Tribune shows that most oil-marketing companies have already started feeding the consumer pumps (dedicated pumps for bulk consumers like transporters, big industries) with diesel from their depots in Jammu and Himachal. This ensures that their bulk consumers get diesel at rates Rs 5-7 per litre cheaper than the rate of diesel in Punjab.
Aware of this, Punjab Finance and Taxation Minister Harpal Cheema has reportedly called a meeting of taxation officers to stop the shifting of sale of diesel from Punjab to other states on Tuesday, and find a solution to stop revenue loss to the exchequer. The price of petrol and diesel went up by 61 paise and 92 paise per litre earlier this month.
Retail pump owners in the border districts of Pathankot, Gurdaspur, Hoshiarpur, Nawanshahr, Ropar, Mohali and Patiala have told The Tribune that their retail customers are shifting to petrol pumps located in Chandigarh, Jammu and Himachal, just along the border with Punjab.
“The state government is not earning any additional revenue from increase in VAT. It’s rather losing revenue. At the same time, the petrol pump dealers are losing business,” lamented Navneet Kumar, a petrol pump dealer in Hoshiarpur. He said even the farmers growing potatoes and peas in Doaba, who buy diesel in bulk, are not buying it from them. They are now buying it from dealers in HP.
Diesel price in Hoshiarpur is Rs 87.50 per litre, while the same is available at Rs 85.77 per litre in neighbouring Una of HP. In Amritsar and Tarn Taran, petrol pump dealers lament how they are losing business as bulk diesel customers are buying fuel from Jammu. “The rate at which my bulk diesel sales are plummeting, I anticipate sales loss of around 60,000 litres in a month,” says Sarabjit Lally, who has petrol pumps in both districts.
“The oil marketing companies, fearing a loss in business, have started supplying diesel from their depots in the Jammu region, which makes it cheaper by Rs 5 per litre,” he added. Against the price of Rs 87.99 per litre in Amritsar, the price of diesel in Jammu is Rs 81.28 per litre.
Monty Sehgal, spokesperson for the Punjab Petrol Pump Dealers Associates, said to stop this practice they had demanded that the government should tell oil-marketing companies to stop this practice or impose Rs 5 per litre entry tax on the bulk supply coming from other states.
