A Mohali petrol pump dealer’s suicide last week has intensified the decade-long demand of the Punjab Petrol Pump Dealers Association Punjab (PPDAP) for parity in Value Added Tax (VAT) on diesel and petrol with UT Chandigarh and other states adjoining Punjab.
G S Chawla, 76, died by suicide in a Panchkula hotel July 22. His suicide note said he had gone bankrupt due to the disparity in VAT on fuel in Chandigarh and Punjab. The PPDAP has given a call to close all petrol pumps in the state from 8 am to 5 pm on Wednesday to pay tribute to Chawla, and lodge a protest against the VAT difference due to which the cost of fuel is higher in Punjab. Haryana fuel pumps are also observing a half-hour shutdown from 8 pm in solidarity.
Chawla and his family owned three petrol pumps, two in Mohali district and one in Fatehgarh Sahib district. Out of the two in Mohali, Chawla had alleged that his family was forced to sell one located in Daun village on Mohali-Kharar road.
The VAT on diesel and petrol is higher in Punjab as compared to Chandigarh and states like Haryana and Himachal Pradesh, driving up fuel prices in Punjab and in the process causing losses to petrol pump dealers, especially in border districts as people preferred to get fuel from outside the state.
According to PPDAP, as on July 23, diesel in Punjab was Rs 4.94 costlier than Chandigarh, Rs 3.89 costlier than Haryana and Rs 3.87 costlier than Himachal Pradesh. Petrol in Punjab was Rs 2.63 costlier than Chandigarh, Rs 2 costlier than Haryana and Rs 2.96 more than Himachal Pradesh. The disparity in fuel prices due to difference in VAT, the PPDAP says, caused 80 per cent loss of sales to petrol pumps located in border districts of the state adjoining Chandigarh, Himachal Pradesh and Haryana.
According to PPDAP VAT advisory committee chairman and Mohali District Petroleum Dealers Association president Ashwinder Singh Mongia, the fight for a level playing field had been around a decade long.
Mongia said that while petrol prices in Punjab have always been relatively higher, the real ordeal for petrol pump dealers started in 2012, when the state government increased VAT on diesel as well, driving up the diesel price as compared to Chandigarh. He said, “In November 2014, Chandigarh further reduced VAT on diesel while Punjab increased it, dealing another blow to petrol pump owners in the state. In Punjab, diesel is our rozi roti (main source of income).”
Mongia said that the bulk consumer base of diesel in Punjab constituted 45 per cent farmers, 25 per cent transporters, 15 per cent industry and around 15 per cent retail, while petrol was largely a retail commodity.
Following many representations, Mongia said that in July 2015, Punjab, Haryana, Himachal Pradesh, Chandigarh and Delhi agreed to have a uniform price. “By that time, Punjab petrol owners’ sales had already reduced to half. We tried to bring back the sales after parity in prices, but could only succeed in making up for 25-30 per cent of sales. One of the reasons sales did not pick up was that bulk purchasers of diesels had already started buying diesel from outside Punjab. And since bulk diesel is purchased on credit, bulk buyers continued to buy from petrol pumps in Chandigarh, making it a transit point for transporters,” said Mongia.
The 2016 hunger strike
In 2016, to highlight the plight of border area dealers, Chawla had led a hunger strike, which ended after assurance from senior Congress leaders who promised that if Congress was voted to power in the 2017 elections, it would bring prices of diesel and petrol at par with Chandigarh and adjoining states. But that did not happen.
The govt’s ‘blunder’
In November on the other hand, Mongia said, Chandigarh slashed VAT on fuel further and by November 2018 after another revision, diesel in Punjab was costlier by Rs 4.5 and petrol by Rs 10 as compared to Chandigarh.
In February 2019, Punjab government reduced petrol prices by Rs 5 and diesel prices by Rs 1. But, that also meant that diesel price remained higher in Punjab.
“We had pointed out to the Punjab government that they had committed a blunder. We wanted parity at least in prices of diesel,” said Mongia.
Chawla’s letter to Governor
In September 2019, Chawla had said that he had written to the Punjab Governor seeking “permission” to die by suicide as he had suffered 80 per cent losses due to difference in fuel prices in Chandigarh and Mohali. The copies, he had said, were also marked to the President, the Prime Minister, Chief Justice of India, Punjab and Haryana High Court Chief Justice, Punjab chief minister and others.
Mongia said that from a sale of 14 lakh litres a month in 2016, by 2020, the sales of Chawla’s petrol pump in close proximity to Chandigarh came down to 2 lakh litres a month. “This happened to all Punjab petrol pump dealers located in proximity to Chandigarh. How one can survive with such scale of drop in sales?” asked Mongia, adding that from 2017 to 2020, while national growth of fuel sales was between 2-3 per cent, in Punjab there was negative growth of 10-15 per cent. Chandigarh, he said, registered a growth of 200 per cent during the corresponding period.
“A survey of all 40 petrol pumps in Chandigarh indicates that about 70 per cent customers belong to neighbouring states of Punjab and Haryana and only 30 per cent customers belong to Chandigarh,” said Mongia. He added said that the main reason for traffic congestion in Chandigarh roads was due to bulk consumers of diesel starting sourcing diesel from Chandigarh, in the process also causing air and noise pollution.
The Covid effect
In mid-June this year, Punjab again increased VAT on petrol and diesel, driving up fuel prices further in the state. The move was aimed at collecting more revenue as it suffered losses during the Covid-19 lockdown.
Petrol pump dealers in the state — particularly in border areas with Chandigarh, Himachal Pradesh and Haryana — believe that if fuel prices are uniform, Punjab could earn more revenue due to increased sales.
Financial Commissioner speaks
There are 3,452 petrol pumps in Punjab. According to Punjab Financial Commissioner (Taxation) A Venu Prasad, the state earned a revenue of around Rs 5,000 crore as taxes annually. Prasad said that recent revision in VAT was likely to translate into an additional Rs 500 crore. “Actually this (June VAT increase) is not an increase. We had slashed VAT in February 2019 thinking that volume [of sales] will increase. But that did not happen. We made a slight increase this time for revenue mobilisation,” said Prasad, dismissing the assertions of petrol pump dealers that decreasing VAT could help earn the state more revenue.
Asked on demand for parity in VAT, Prasad said, “We had taken up the matter with Chandigarh requesting them to increase VAT. In fact, we have taken up this with adjoining states several times to ensure uniform fuel prices.
‘Oil mafia making things worse’
PPDAP alleges that a well-oiled oil mafia was operating to supply diesel to bulk consumers to Punjab from outside the state. PPDAP president Paramjit Singh Doaba said, “For instance, if any industry uses six tankers of diesel in a month. Each tanker carries 12,000 litres and if it gets diesel cheaper by Rs 3 a litre, one tanker would save the industry Rs 36,000 and six tankers would save more than Rs 2 lakh a month on fuel,” said Doaba. “It is like liquor smuggling. One goes to Chandigarh, gets vehicles filled with fuel. But while there is law to check smuggling of liquor from Chandigarh, the one getting his vehicle filled with fuel from Chandigarh and coming back to Punjab cannot be proceeded against legally,” he added.
PPDAP cites a 2018 case registered in Mohali district for smuggling of 2,500 litres of diesel from a petrol pump in Chandigarh for supply to a construction firm on Chunni-Landran road. Three persons, including the manager of the petrol pump and tanker driver were arrested by Mohali police as the tanker was intercepted at YPS Chowk.
On allegations of smuggling, A Venu Prasad said, “This was the only case of 2018. There has been no recent case of smuggling. If they (PPDAP) have any information, they should share with us and we will take action.”
Haryana Association in solidarity with PPDAP
All Haryana Petroelum Association president Dinesh Goyal said that to pay tribute to Chawla and express solidarity with PPDAP, the association has given a call to keep all petrol stations shut in Haryana from 8 pm to 8.30 pm on Wednesday. “We have also given a call to keep lights switched off to pay tribute to G S Chawla,” he said.
On the PPDAP demand of parity in fuel prices, Goyal said, “We are also for it. In Panchkula, fuel is costlier than Chandigarh so sales take a hit. In other areas like Haryana’s borders with Delhi and Rajasthan, fuel is cheaper on Haryana side, while it is costlier in border areas with Uttar Pradesh. At some places, there are more sales, at other there are lesser sales. We are for uniformity in the prices of fuel.”
Karnal Petrol Pump Association president Ram Kumar Kalyan said that district-wise closure of petrol pumps for half an hour was already happening in many districts as a tribute to Chawla. “We demand justice for the family of Chawla. There should be a thorough probe by CBI or any other SIT to bring guilty to book,” said Kalyan.
Panchkula police have booked six persons, including three Hindustan Petroleum Corporation Limited (HPCL) officials and three others of a family that purchased Chawla’s petrol pump.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines