The streets of Rajasthan wore a deserted look as petrol pumps across the state began a 2-day “No Purchase, No Sale” strike on March 10.
The strike, organized by the Rajasthan Petrol Dealers Association (RPDA), aims to draw the government’s attention to the crippling impact of high fuel prices and taxes in the state.
Petrol pump operators, grappling with financial losses due to the increased Value-Added Tax (VAT) on fuel, have been demanding a reduction in VAT for a long time, but their pleas have fallen on deaf ears.
The strike, which has commenced on March 10, has brought the state’s fuel trade to a standstill.
Petrol pumps across Rajasthan have shut down operations, refusing to purchase or sell petrol and diesel.
This move comes as a last resort for petrol pump operators, who have been struggling to keep their businesses afloat amidst the rising fuel prices and stagnant dealer commissions.
VAT Rates in Rajasthan and other States
According to the RPDA, the VAT rate on petrol in Rajasthan stands at a staggering 31.04%, along with an additional road development cess of Rs 1500/KL.
Diesel is taxed at a VAT rate of 19.30%, with a road development cess of Rs 1750/KL.
These rates are among the highest in the country, making fuel significantly more expensive in Rajasthan compared to neighboring states.
“We have been demanding a reduction in VAT for years, but our pleas have gone unheard,” said Suneet Bagai, President of the RPDA. “Petrol is being sold much cheaper in neighboring states, and we are continuously facing losses due to the high taxes imposed by the state government.”
The disparity in fuel prices has led to a concerning trend, where vehicles passing through Rajasthan often avoid buying fuel from the state.
Instead, they fill their tanks before entering or after crossing the state borders, resulting in a significant revenue loss for the state’s petrol pump operators.
“The commission for dealers has not increased for the last 7 years, while our operational costs have skyrocketed,” Bagai added. “Many petrol pumps are on the verge of closure due to the financial strain caused by the high taxes and stagnant commissions.”
Other Impacts of Petrol Pump Strike
The strike has not only affected petrol pump operators but has also caused inconvenience to the public, who are already grappling with rising petrol and diesel prices.
Long queues and frustrated faces were seen at the few petrol pumps that remained open, catering to emergency services and essential vehicles.
The RPDA has highlighted that Prime Minister Narendra Modi had promised to reduce petrol prices, but no significant action has been taken so far.
They argue that if VAT rates were reduced to the levels of neighboring states like Punjab, fuel sales could increase by 25%, and revenue to the state exchequer could rise by 23%.
“Lower fuel rates not only benefit the common man but also boost tax revenues,” Bagai explained. “It provides relief to consumers and contributes to the overall economy. Additionally, lower fuel rates can lead to reduced prices of goods and services.”
The strike has gained support from various quarters, with trade unions and consumer rights groups backing the demands of the petrol pump operators.
However, the state government has remained silent on the issue so far, raising concerns about the potential impact on the state’s economy if the strike continues.
As the strike as started and will continue till March 12, all eyes are on the government’s response to the demands of the petrol pump operators.
The situation underscores the need for a balanced approach that considers the interests of all stakeholders – the state’s revenue, the financial viability of petrol pump businesses, and the burden on consumers.
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