Bhubaneswar, June 17: The state government’s proposal to increase value added tax on diesel and petrol prices from existing 18 per cent to 20 per cent will have a cascading effect in the rise of petroleum prices.
Two per cent hike will push the prices of petrol and diesel by Rs 1.41 and Rs 1.21 respectively in the state. At present, petrol is sold at Rs 70.67, while the price of diesel is Rs 60.64 in Bhubaneswar. It differs marginally from district to district. While the state government levies a two per cent entry tax on diesel and petrol, it used to tax 18 per cent towards VAT.Petrol pump owners feared loss of business following the proposal to increase VAT. The increase will make diesel and petrol prices of the state at par with neighbouring states of Andhra Pradesh and Bengal.
“Most of the trucks transporting goods from Andhra Pradesh or Bengal passing through the state refill fuel in Odisha as the diesel prices are less in the state compared to the other two states. Once the prices of fuel became the same, the oil business in the state will be hit. The proposed hike will affect the oil business,” said general secretary of Utkal Petroleum Dealer’s Association Sanjay Lath.
With the increase, the transport operators also expect a fare revision. The state government had revised the bus fares in October last year. As per the last revision, fare of ordinary buses had gone up to 59 paise per kilometre while the fare for express buses was increased to 62 paise per kilometre.
Similarly the fare of deluxe buses had increased to 82 paise per kilometre, whereas the fare of air-conditioned deluxe buses had gone up to Re 1 per kilometre.
“The price of diesel was Rs 55.01 per litre during the last revision. At present, it stands at Rs 60.64. An additional two per cent rise in VAT will make it Rs 61.85. The difference in price between the time of last revision and now is Rs 6. 84 per litre. We have already submitted a proposal to the state government last week to revise the bus fares,” said general secretary of State Private Bus Operators’ Association Debendra Sahu.
