Imphal, May 29 2022: Retail outlets of Manipur would not be purchasing fuel from oil marketing companies for one day.
Showing solidarity to the decision of the North East India Petroleum Dealers Association, the Manipur Petroleum Dealers Association would not be purchasing any fuel from the oil marketing companies viz; IOCL, BPCL and ESSAR on May 31 .
On account of this, the Government will lose Rs 1.38 crore in Value Added Tax (VAT) and Rs 2.07 crore in Central excise duty on the particular day.
The prices of petrol and diesel have been recently slashed to Rs 101 (approximately) and Rs 87 (approximately) respectively, even as the dealer will have to sell the same at the rate procured earlier.
The margins given to dealers or ROs too has remained unchanged since 2017 .
When the ROs have been facing a huge burden in terms of capital investment because of the ‘static’ dealer margins, the Central excise duty levied on both petrol and diesel was slashed substantially some days back which led to considerable decline in the retail selling prices of both petrol and diesel.
As a result, dealers are now running into a loss of around Rs 1.70 crore in a single day.
It was this loss which prompted dealers to suspend purchase of fuel from oil marketing companies for one day.
Speaking to media persons this afternoon, All Manipur Petroleum Dealers Association convenor RK Prakash said that reduction of taxes levied by the Government on fuel leads to decline in fuel prices which implies fall on ROs’ capital investment.
Such measures are also beneficial to the masses.
But the recent cut down on Central excise duty severely affected capital investment of ROs, leave aside getting dealer margins, Prakash said.
In 2017, petrol and diesel were priced Rs 63.65 and Rs 53.87 respectively.
Their respectively current prices are Rs 101.22 and Rs 87.17 .
It implies that the prices of petrol and diesel have been hiked Rs 37.57 and Rs 33.03 respectively since 2017, Prakash pointed out.
He said that the hike in fuel prices led to quantum increase in capital investment.
Hike in fuel prices generally implies inflation which means ROs have to raise the monthly salaries of their staff, he said.
Hike in fuel prices also leads to rise in capital investment as well as monthly expenditure, he said.
The dealer margins given on petrol and diesel in 2017 were Rs 3.51 and Rs 2.18 respectively and these margins remain unchanged till date, he continued.
Prakash said that the Government may cut down both VAT and Central excise duty but the reduction should not be done in a haphazard or abnormal manner.
The reduction should be made gradually so that the ROs’ capital investments are not adversely affected, he asserted.
The State Government cut down the VAT it levied on fuel in August last year after issuing a notice 14 days before the reduction came into effect.
This enabled the ROs to clear their existing stocks before purchasing fuel from oil marketing companies at the revised rates, Prakash said.
He then appealed to both the State Government and the Central Government to follow the same system/procedure.
Exuding confidence that the Government would take up necessary measures after taking into account all the difficulties being encountered by dealers, Prakash clarified that the dealers’ decision of not purchasing fuel from oil marketing companies on May 31 would not cause any inconvenience to the public as sale of fuel would go on as usual.