20% drop in sale of fuel as NCR runs away with Delhi’s customers

The disparity in petrol and diesel prices in Delhi compared to the neighbouring states of Uttar Pradesh and Haryana has resulted in a 20% drop in the sale of fuel in the national capital. An increasing number of Delhiites are filling up the fuel tanks of their vehicles from petrol pumps in UP and Haryana, located just across the borders these states share with the national capital. The difference in prices is around Rs 2-3 per litre. The situation is such that fuel dealers fear that if immediate measures are not taken, the dip may be as bad as 40% in the coming days.

Delhi recorded a sale of over 10 crore litres of petrol and over 9 crore litres of diesel in September. However, according to the dealers, this has gone down by about 20% after the Centre slashed the rates of petrol and diesel by Rs 2.50 per litre on 5 October.

After the Centre slashed the rates, BJP-ruled states like UP and Haryana too reduced the value-added tax (VAT) by an equal amount. Thus, there was an effective cut of Rs 5 in the neighbouring states. However, Delhi did not lower VAT. As a result, in comparison to Delhi, petrol in UP and Haryana is cheaper by Rs 2.59 and Rs 1.95 per litre, respectively, while diesel in these two states is cheaper by Rs 2.02 and Rs 1.72 per litre, as on 10 October.

“Because of this disparity, many Delhiites are getting their vehicles filled from petrol pumps in the National Capital Region, particularly from neighbouring Noida, Ghaziabad and Gurugram. This has resulted in our sales dipping by about 20% in the last two weeks. This may further dip by 40% after another two weeks,” Nischal Singhania, president of Delhi Petrol Dealers’ Association told The Sunday Guardian.

Meanwhile, petrol pumps in Noida, Gurugram and Ghaziabad are wooing vehicle owners by advertising their “low fuel prices”. Many of them have put up hoardings outside their pumps, proclaiming, “Dilli se sasta petrol/diesel uplabhdh hai (Petrol and diesel are available at cheaper rates than in Delhi)”.

Delhi has around 400 petrol pumps. Singhania claimed that around 200 of them were on the verge of closing down, which would lead to the retrenchment of thousands of workers, thus affecting lakhs of people in the city.

Touching on another important aspect of the development, Delhi fuel dealer Anil Bijlani said the disparity in rates was not only leading to heavy revenue losses, but was also adversely affecting the environment of Delhi as more and more Delhiites were using the “Euro IV” fuel, coming from UP and Haryana.

“Delhi petrol pumps sell only the eco-friendly ‘Euro VI’ fuel, which causes minimum pollution. Since the use of Euro IV has increased in the last two weeks, this can adversely affect the environment of the national capital,” he said.

Singhania said that the Delhi Petrol Dealers’ Association had decided to shut all fuel pumps, including CNG, in the national capital on 22 October. He, however, said the association members had been asked to help those in urgent needs such as medical emergencies.