With price of crude oil declining on a global level, transporters in India, represented by All India Motor Transport Congress (AIMTC), have demanded a reduction in fuel prices as freight movement has taken a hit during the lockdown period. The association has also asked the government to suspend the collection of toll tax on national highways as well.
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As per AIMTC, the situation of truckers and transporters in the country is far from ideal, and since the transportation sector has almost come to a standstill, existing fuel prices and toll taxes will add on to their woes.
The association claims that despite diesel and petrol prices declining globally, the prices in India are exerting pressure on an already subdued transport sector, along with high toll taxes and VAT as well.
With the global crude oil prices on a downward spiral, it is hoped that it will help major consumers such as India manage fiscal pressures coupled with collateral damage done by corona fallout, it added.
In a statement, Kultaran Singh Atwal, President, AIMTC, said, “The cost of the Indian basket of crude, which represents the average of Oman, Dubai and Brent crude, was USD 20.56 a barrel on 17 April, 2020. Brent oil prices have collapsed around 60 per cent since the start of the year while the price of diesel has fallen only by 10 per cent. From the beginning of the May 2014, the Government did not pass on the benefit of plummeting crude oil prices to the public instead increased profit share of the OMCs by increasing the excise duty.”
“Apart from crude oil rates there are two important factors which determine the fuel cost – VAT and Excise Duty – which has increased significantly in last four years. Irony is – we are paying more taxes than the cost of obtaining fuel. Excise Duty was Rs 9.20/litre on Petrol and Rs 3.46/litre on diesel on November 1, 2014,” he added.
Atwal clarified that in the present scenario, excise duty on petrol amounts to Rs. 22.98 per litre, and Rs. 18.83 per litre on diesel, including road cess in both cases.
AIMTC also urged the government to suspend the collection of toll on national highways, which has been resumed from April 20 as per revised lockdown guidelines. “These must be suspended for six months and the toll collection tenure may be extended for an equivalent period,” it added.