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Petrol price hike: Traders' body demands cut in VAT
May, 24th 2012

Unhappy over the increase in price of petrol, the UP Petrol Traders' Association (UPPTA) has urged the ruling government to slash the rate of value added tax (VAT) over petroleum products to give some relief to the common man. Presently, the UP government charges 26.55% VAT which is significantly higher than what some other states are charging. Delhi and Haryana government levy the lowest rate of VAT which is 20%. "If not at par with these states, the UP government should bring the rate of VAT down to some extent," said B N Shukla, president of the association.

According to estimates prepared by UPPTA, the price of petrol would go up by Rs 7.95 per litre inclusive of taxes. This means, a litre of petrol would cost Rs 77.77 approximately against the old rate of Rs 69.82. If the rate of VAT in UP is brought at par with Delhi, the price of per litre petrol could go down to Rs 73.14 per litre. The association clarified that the price of petrol in premium category could not be ascertained exactly. The reason: each company has a different rate for their premium brand. However, they said that the premium petrol could cost anything around Rs 80 per litre.

The association has condemned the decision not only because of the hefty cost involved. It doesn't agree with the logic given for the hike. "The petroleum companies and the Union government said that the price is being increased because of weakening of the rupee against dollar. But this logic is beyond my understanding as the cost of crude petrol has gone down in the international market which the decision makers should have taken into account," explained Shukla. The petrol price hike was strongly condemned by people from all walks of life in the city. "The historical rise surely owes its genesis to a hysterical mind," said Priyam Agarwal, a hostel inmate who studies in a private coaching institute in the city. "I get limited money from home and almost half of it is fuel expenses. This is unfair," he claimed.

Equally disturbed was Pankaj Bajpai, a teacher. He said, "This immense hike would increase my conveyance expenditure by at least 25% since the school I teach in is 22 kilometres from my residence. I think I will have to seriously think about a battery operated alternative or resort to public transport to save money," he said. Aparna Singh who works in a government office bought a gearless bike two year ago to save money. "Though I own a car, we use it occasionally to keep expenditure on fuel under control. Now I feel that the purpose of buying a two-wheeler stands defeated," said Aparna.

Hike in petrol prices alone doesn't bother people. It creates a ripple effect that adds bit by bit to one's house-hold economy. "Each time petrol prices go up, vendors start demanding for a hike in whatever they sell. For instance, the milkman would increase per litre price of milk because his spending on commuting has gone up. The vegetable vendor would rue that he is burdened with additional expenditure on conveyance and compel us to pay more. And believe me, the spending on vegetables has gone up drastically in the last few years," said Moushumi Batabyal, a housewife.

Several people also offered a way out of the situation. "The hike has underscored the need for improving the public transport system. Government should seriously think over rolling out more CNG autos and busses," said Supriya Mishra, a student. Businessman Rajiv Satija, in fact, urged the ruling government to turn dream of a metro rail service into a reality.

Political parties and trader associations also condemned the decision and have threatened to stage demonstrations against it. The Lucknow Udyog Vypaar Mandal would stage a protest at the dharna sthal on Thursday.

Meanwhile, vehicle owners tried their last bit to save money. Scores of petrol pumps witnessed a surge in the number of consumers till late night as the new rates were to get effective from midnight. In some cities, petrol pump dealers shut down their outlets to gain profits by selling price at higher rates. The Bahraich and Lakhimpur Kheri administration launched a cracked down on such dealers.

Price per ltr / rs -- date of change

77.77 -- May 24, 2012

69.82 -- April 01, 2012

69.82 -- December 01, 2011

70.65 -- November 16, 2011

72.99 -- November 04, 2011

71.03 -- September 16, 2011

67.71 -- July 01, 2011

67.42 -- May 15, 2011

62.15 -- January 16, 2011

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