Petrol Price Crosses Rs 89 Per Litre Mark in Punjab; Pump Owners Pitch for Tax Uniformity

Chandigarh: Petrol price in Punjab crossed the Rs 89 per litre mark on Monday, with fuel pump owners pitching for uniformity in taxes on petroleum products in the northern region.

In Ludhiana, petrol rate rose to an all-time high of Rs 89.54 per litre, while diesel price increased to Rs 75.20. In Mohali, petrol rate jumped to Rs 89.79 while diesel price was Rs 75.41, according to petroleum dealers.

Fuel pump owners demanded that the Punjab government bring uniformity in value added tax on petroleum products with other states in order to stop smuggling of fuel.

They pointed out that difference between petrol and diesel price in Chandigarh and Punjab is around Rs 9 per litre and over Rs 2 per litre respectively.

"Smuggling of fuel from Chandigarh is rampant because of low rate of taxes on fuel. Moreover, big transporters prefer to buy fuel from Chandigarh rather than purchasing from fuel pumps located in Punjab," said Mohali-based fuel pump owner Ashwinder Mongia.

According to fuel pump owners, the disparity in petrol and diesel prices has particularly hit petrol pump owners in the border districts of Sangrur, Patiala, Bathinda, Gurdaspur, Mohali, Fathegarh Sahib, Rupnagar, Hoshiarpur, Gurdaspur and Mansa.

"The smuggling of fuel has not only hit our trade but is also denting the revenue collection of the state government. As per an estimate, Punjab is losing around Rs 400-500 crore of revenue per annum because of high rate of taxes on fuel, Mongia said.

Punjab imposes second highest tax on petrol at 35.12 per cent after Maharashtra, traders said.

At present, tax rate on diesel in Punjab is 16.74 per cent. However, tax rate on petrol in Haryana, Himachal Pradesh, Delhi and Chandigarh stand at 26.25 per cent, 24.43 per cent, 27 per cent and 19.74 per cent respectively.

VAT on diesel in Haryana, HP, Delhi and Chandigarh stands at 17.22 per cent, 16 per cent, 17.39 per cent and 11.40 per cent respectively, they said.

Notably, on September 25, northern states — Punjab, Haryana, Delhi, Uttar Pradesh, Himachal Pradesh and UT Chandigarh — had agreed to fix uniform tax rates on petroleum products.