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Petrol sales drop 25% in Delhi as VAT cut makes fuel cheaper in UP, Haryana


NEW DELHI: Petrol sales in Delhi have slumped by a quarter as vehicle owners in the country’s largest car market and hordes of daily commuters driving or riding into the capital for work from townships around the capital began flocking to outlets in UP and Haryana since these states slashed VAT after the Centre cut excise duty on November 3.
More than a quarter of Delhi’s 403 petrol pumps located on or near the border in particular have seen a dramatic drop in sales as consumers were drawn to UP and Haryana where petrol became cheaper by more than Rs 8 a litre as the Arvind Kejriwal government is yet to reduce VAT.
“About 115 petrol pumps in Delhi are near the border with UP and Haryana. These pumps have seen sales slide 50-60%. The pumps in areas such as trans-Yamuna are suffering more as UP is a bigger draw due to the wider gap with Delhi’s price and larger number of people driving into the city from townships near the capital,” All India Petroleum Dealers Association president Ajay Bansal told TOI.
After the Centre cut excise duty on petrol by Rs 5 and diesel by Rs 10 per litre, the UP and Haryana governments reduced VAT to bring down the price of each fuel by Rs 12 a litre.
Petrol in UP is now Rs 8.86 per litre cheaper than Delhi against Rs 3.36 a litre earlier.
In Haryana, it costs Rs 8.22 a litre less than Delhi compared to Rs 2.43. Diesel, however, still remains cheaper by 8 paise a litre in Delhi than UP against 49 paise earlier; and 39 paise than Haryana compared to 8 paise before.
No surprise then that petrol sales in Delhi have dropped to 2,170 KL (kilo litres) from a little less than 3,000 KL. The slump in diesel sales was much lower at about 8-9% to 1,740 KL because of the smaller price differential.
Dealers said they have appealed to the Delhi chief minister to reduce VAT as the loss of sales will also reduce the state’s revenue collection.
Sources said the chief minister’s office assured them that the government was examining the issue.


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