Despite an excise duty waiver offered by the central government, the Madhya Pradesh government is still selling petrol Rs 12 per litre and diesel Rs 4 per litre costlier than neighbouring poll-bound Uttar Pradesh.
As Diwali bonanza for the common man, the Centre had announced an excise duty cut of Rs 10 in diesel and Rs 5 on petrol urging states to follow suit. Accordingly, the MP followed by a four per cent VAT cut and Rs 1.5 each on both the fuels. The assembly polls in Uttar Pradesh are scheduled for 2022, while in MP it is due in late 2023.
Compared with a neighbouring state, petrol is being sold at Rs 95.28 a litre in capital Lucknow, whereas in Bhopal it is being sold for Rs 107.23, at a difference of Rs 11.95 per litre. The gap is narrower on diesel, as the rate of diesel was Rs 86.80 per litre on Wednesday as against Rs 90.87 a litre in Bhopal.
After initial reluctance on VAT cut, Chhattisgarh and Rajasthan, both have hinted at cutting down VAT. Rajasthan Chief Minister Ashok Gehlot on Tuesday hinted at a VAT cut without specifying the extent and date when the decision comes into force. On Wednesday, CG Chief Minister Bhupesh Baghel during an event in Raipur too mellowed down while saying the state will take a call on VAT seeing rates in other states and promised the rates will be lowest in Chhattisgarh.
Both Baghel and Gehlot had earlier asked the Centre to cut down excise duty further, citing duty levels of the UPA era.
Commoners are still feeling the pinch in MP. The fuel rates should be brought down more, a marketing executive Rakesh Singh said. A student of engineering college in the city, Megha Surana said that fuel should be cheaper as students like her can’t afford costly petrol.
Meanwhile, BJP state secretary Rajnish Agrawal claimed that fuel prices weren’t an issue in recent bypolls as the public have faith in the party’s intent and leadership and knew the fuel taxes are crucial for the economy in Covid-19 era. People know money is going to welfare works and not meant for corruption. Agrawal added that as things are returning to normal, more relaxations are possible in future.
And the Congress party though believes fuel prices did have an impact in the recent bypolls, in their favour. Party spokesperson Ajay Singh Yadav claimed the fuel price surge was an issue and it helped the party gain a vote surge of around 5 per cent in most of the seats. The state government resorted to misuse of government machinery, big announcements and massive resources managed to damage control and win, claimed Yadav.
He said the party will continue to fight for lower fuel prices. From November 15, we are starting Jan Jagran Abhiyan on issues of inflation and others, affirmed Yadav speaking of a nationwide campaign launched by the party since Nov 15, after a formal inauguration on Nov 14.
Taking a look at the past, Madhya Pradesh had been a state which always taxes the heaviest VAT and cess on the fuel, in the country. Prices are on the higher side in far-flung districts like Anuppur where petrol was retailed at Rs 110.27 a litre and diesel at Rs 93.58 per litre.
Dealers’ rue heavy losses and shrinking sales
Away from the political tussle, fuel pump dealers in the state are complaining of heavy losses after a surprise cut in excise duty and VAT which left them no chance to recover taxes through sales. Ajay Singh, the president of MP Petrol Pump Dealers’ Association claimed that dealers have incurred losses from Rs 5 to 20 lakh each, depending upon their business volumes. “We are discussing with the state government and nationally as well with the Centre through our national body.”
We draw a fixed commission of Rs 3.21 a litre on petrol and Rs 2.12 per litre on diesel which has not been revised since 2017 whereas capital input has surged following a sharp surge in prices of fuel, added Singh.
Dealers affirm the sales have dipped due to cheaper fuel in neighbouring states like UP and Chhattisgarh. They also blame biofuel, an adulterated and unauthorized alternate of diesel that sells illegally at Rs 70 a litre in the state and people selling petrol sourced from neighbouring states is hampering their sales as well. Manish Pandey, a petrol pump owner from Chhindwara, adjoining Maharashtra affirmed rate difference in fuel makes his customer opt for Maharashtra or Chhattisgarh, adjoining neighbouring Balaghat. Due to tax cut, Chhindwara dealers have lost around 7-8 cr, he added claiming covid19 related slowdown has already hampered sales drastically.
Another dealer from Dhar, Ajay Modi, cited similar issues. Biofuel sells openly in areas like Alirajpur and Jhabua and locals also sell petrol illegally in ration and paan shops, he added. Lower rates in neighbouring states always affect our sales, he claimed, backing for a uniform VAT rate in states, if the fuel isn’t being brought into the GST net.
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