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Demand for reduction in VAT on diesel

Special Correspondent

“Would check inflation, promote use of eco-friendly Euro 4 diesel”


Consumers buying inferior quality Euro 3 diesel from Haryana due to higher rate in Delhi

With latest diesel price hike, disparity of rates between the two States would increase


NEW DELHI: Delhi Petrol Dealers Association (DPDA), the apex body of petrol dealers here, has urged the Delhi Government to immediately reduce the Value Added Tax on diesel to reduce the impact of the price hike announced by the Centre on Thursday.

The Association said that by bringing the rate down the Government would not only ensure lower inflation, but also cut down the incentive to consumers for buying inferior quality Euro 3 diesel from Haryana.

This in turn would promote the sale of cleaner Euro 4 diesel in Delhi and help improve the city's ambient air quality.

In a statement, the Association said the Delhi Government should accede to the Union Petroleum Minister Jaipal's Reddy's appeal to all State Governments to reduce VAT on diesel to absorb the hike in diesel prices.

Association vice-president Nishit Goel said Delhi has a higher VAT of 12.5 per cent on diesel than Haryana (8.8 per cent). With the latest hike in diesel prices and the imposition of VAT on it, he said, the disparity in rates between the two neighbouring States would only increase. This would further put Delhi transporters and consumers as well as major industrial customers at a disadvantage.

Noting that due to this disparity in rates, a large number of diesel consumers prefer buying oil at cheaper rates from Haryana, Mr. Goel said his organisation has for long been requesting the Delhi Government to rationalise this difference.

“The demand for diesel in Delhi is more than 50 lakh litres per day but petrol dealers are selling only 25 lakh litres of diesel per day. This demand supply gap is being fulfilled by diesel coming from outside the border of Delhi. This in turn is resulting in revenue loss to the State, sale loss to the petrol dealers, and environmental loss to the citizens of Delhi,” he added.

Association president Atul Peswaria said the Delhi Government has failed to check the influx of cheaper Euro 3 diesel into Delhi, which sells the eco-friendly Euro 4. He added that the oil marketing companies have spent over Rs.40,000 crore to launch this product on directions of the Supreme Court, but neither they nor the Delhi Government look interested in promoting the clean Euro 4 diesel.

Diesel is deliberately priced low for use in trucks, public transport, agriculture and Railways. Its prices bear a multiple effect on inflation. Therefore reducing VAT on diesel in Delhi will not only promote the use of Euro 4 diesel, but will also help in reducing inflation, he said.

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