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To get the state government to roll back the recent value-added tax (VAT) hike, petrol pump dealers in Punjab have decided not to purchase petroleum products on Friday.
According to the dealers, the volume of diesel sale has declined seven to eight per cent a day due to the higher VAT.
About 500 petrol pumps in border district of the state were the worst affected, as transporters prefers to buy diesel from Haryana or Chandigarh where it is cheaper. The state government had increased VAT on diesel from 9.75 per cent to 12.35 per cent (including surcharge of 10 per cent) last week, which resulted in high diesel price in the state compared to neighboring states. VAT in Haryana is 9.35 per cent, Chandigarh (9.68 per cent) and Himachal Pradesh (10.6 per cent).
After the increase, diesel cost in Punjab is Rs 53.6 a litre while it is Rs 52.35 a Haryana and Rs 52.64 in Chandigarh.
Daily sale of diesel in Punjab in terms of volume is around 8,500-9,000 kilolitre (kl) while that of the petrol is around 2,500 kl. Petrol pumps in border districts have already lost petrol sales to neighboring states because of high Vat, 30.5 per cent, making Petrol costlier by Rs 6-7 a litre.
Speaking to Business Standard, Punjab Petroleum Dealers Association President J P Khanna said, "Transport sector contributes 45-50 per cent of our total sales, followed by agriculture (30 per cent) and industry (20 per cent). The transporters having national permit are buying diesel from neighboring states because of cheaper prices."
Punjab has about 3,000 petrol pumps around that are protesting under the aegis of The Punjab Petroleum Dealers Association. According to Khanna, all the pumps combined together purchase worth Rs 300 crore of petroleum products a day. Khanna said by hiking VAT on diesel the state intends to earn more revenue but in the long run the state would lose on sales, as transporters would buy the bulk of diesel from outside the state.
