Fuel outlets on Karnataka, Maharashtra borders seek VAT cut

ANANTAPUR: Even as hundreds of fuel outlets on Karnataka and Tamil Nadu borders have already been incurring huge losses due to variations in fuel prices, the decision of the Karnataka government to reduce VAT (value-added tax) on petroleum prices came as a big shock for these fuel outlets. After the Centre reduced petrol and diesel prices, simultaneously Karnataka reduced VAT on fuel resulting in the price of diesel at Rs 85.98 and petrol Rs 101.64 per litre.

While in AP outlets, diesel price is Rs 97.14 and petrol Rs 111.11 per litre. Difference between AP and Karnataka is Rs 11.16 per litre diesel and Rs 9.47 on petrol. This has an adverse impact on the fuel outlets located closer to Karnataka border areas. People prefer Karnataka outlets to get more quantity of fuel, and even motorcycles that need small quantities of fuel have started rushing to Karnataka outlets.

Madakasira municipality is on Karnataka borders and Karnataka fuel outlets exist about 5 kms away from the town, and there is just 10 metres distance between AP and Karnataka border outlets.

In addition to routine business of motorcycles and four-wheelers, the construction companies have been already preferring to purchase diesel from Karnataka outlets in Rayalaseema region while the Polavaram based companies depend on Yanam fuel outlets but claiming the prices of AP in the estimations and bills. Diesel plays a key role in the government works and projects in construction works for transportation of goods, material to the sites.

L. V. Prasad, an analyst, said about 35 per cent of the budget should be spent on fuel in various forms, digging machinery, construction and transportation. While price varies more than Rs11, the subcontractors prefer to purchase fuel from other states to get more profits.

A dealer from the borders of Madakasira area lamented that the business was not even equal to petty vendors in rural areas who were purchasing fuel from Karnataka and doing illicit business.  Each outlet pays at least Rs15,000 each towards salaries of workers.

Hundreds of interstate buses and lorries plying via AP towards Bengaluru or Maharashtra are purchasing diesel in Karnataka outlets and no vehicle prefers to fill in AP outlets because of huge difference in prices, according to a dealer from Chilamathur in Hindupur area.

Another dealer from Madakasira said the outlets could be closed if the situation continued. “The state government should reduce prices and make them equal to Karnataka to us,” he said.