Sale of petrol, diesel in Punjab lower than national average

CHANDIGARH: The average monthly sale of petrol and diesel at 122 kilolitres per pump in Punjab is lower than the national average of 170 kilolitres per pump, despite the fact that the state is one of the most promising markets for vehicle makers.

Vijay C Roy

Tribune News Service

Chandigarh, May 3

The average monthly sale of petrol and diesel at 122 kilolitres per pump in Punjab is lower than the national average of 170 kilolitres per pump, despite the fact that the state is one of the most promising markets for vehicle makers.

Due to high concentration of petrol pumps in the state and high VAT on these two fuels, the sale is reflected in neighbouring states. Punjab has 3,380 fuel pumps of public sector oil marketing companies, including Indian Oil (1,718), Bharat Petroleum (617) and Hindustan Petroleum (888) and private oil companies like Essar and Reliance.

As compared to Punjab, in Haryana, which has 2,726 petrol pumps, the monthly sale is around 180 kilolitres while in Delhi and Chandigarh, the average monthly sale is 450 and 380 kilolitres per pump, respectively.

A senior official in an oil marketing company said, “Punjab has the highest concentration of petrol pumps in the country and that’s why average sale of pump is low. There are fuel pumps in the state, especially in the rural areas where the monthly sale is even less than 50 kilolitres.”

Gurmeet Monty Sehgal, spokesman of the Petrol Pump Dealers Association Punjab, said besides the high concentration of petrol pumps, high VAT on petrol and diesel in the state was also acting as a stumbling block. He said the petrol pumps, especially located along the border areas of Chandigarh, Haryana, Rajasthan, Himachal Pradesh, are losing out business to neighbouring states because of the high VAT on petrol and diesel. In these border areas, people prefer to purchase fuel from the neighbouring state where the rate is cheaper than Punjab.

In Punjab, more than 700 pumps are operating in the ‘border-belt’ districts of Sangrur, Patiala, Bathinda, Mohali, Ropar and Hoshiarpur.

Punjab charges about 36.18% VAT on petrol, Himachal Pradesh (27%), Haryana (26.25%), J&K (29.90%) and Chandigarh (24.77%). Due to high VAT rate, petrol in Punjab is costlier between Rs 3.57 and Rs 6.12 per litre as compared to other states.

Further, due to high VAT, Punjab’s market share in petrol sales vis-a-vis Haryana has gone down from 68% in 2000 to 48%.

Similarly, in case of diesel, Punjab charges VAT at 17.36%, Haryana (17.22%), Himachal (16%) and Chandigarh (16.43%).