Hyderabad: Diesel and petrol sales in Telangana have been dealt a body blow after the government imposed Rs 2 additional VAT per litre. It is forcing the government to seriously reconsider its decision. The government is likely to rollback the VAT hike anytime soon.
The impact is more on diesel sales than petrol which fell drastically as heavy motor vehicles crossing inter-state borders opt to refuel in AP and other neighbouring states’ pumps located on the border to save up to Rs 2.50 per litre. The government had aimed to earn about Rs 75 crore as revenue per month through additional VAT but the fall in sales has resulted in a loss of over Rs 100 crore.
The business of petrol pumps is largely dependent on transport vehicles, whose sales contribute 80 per cent of their total business. Pump owners say the government’s VAT policy has backfired and needs to be rectified at the earliest to save it and pump owners from incurring huge losses.
The major chunk of sales that is about 30 per cent of diesel is purchased by the vehicles from neighbouring states.
