The state’s petrol dealers ended their strike on Tuesday after being assured that the government will consider their demands sympathetically.
Jyoti Mukul & Ganesh Kanate
NEW DELHI/MUMBAI: The state’s petrol dealers ended their strike on Tuesday after being assured that the government will consider their demands sympathetically. The strike had begun at midnight on Sunday.
The promise was made by Union Petroleum Minister Murli Deora and Civil Aviation Minister Praful Patel after an hour’s meeting in New Delhi. Petroleum Secretary MS Srinivasan was also present.
The dealers are pressing for a cut in the sales tax on petroleum products in Maharashtra. About 2,200 petrol pumps were shut across the state. But some 40 company-owned pumps in Mumbai and 700 around Maharashtra continued to operate.
Maharashtra levies the country’s highest sales tax on diesel and a heavy tax on petrol. In Mumbai, the sales tax rates are 28 per cent on petrol and 33 per cent on diesel. In the rest of the state, the corresponding figures are 27 and 30 per cent. In addition, the government levies a surcharge of Rs1 on the sale of petroleum products.
Deora told DNA: “Government has assured the dealers that some favourable solution to the problem will be determined at a meeting in Mumbai next week.”
The meeting will include representatives of the state. Taking a cautious stance, Patel called for a “rational approach” on the issue because it has revenue implications for the state.
Ashok Dixit, president of the Federation of All-Maharashtra Petroleum Dealers Associations (FAMPEDA), and Ravi Shinde, president of the federation’s Mumbai unit, said a cut in sales tax would not result in loss of revenue for the state but would have the opposite effect. They cited the example of West Bengal, where a cut in sales tax led to higher revenue from growing sales. Dixit and Shinde said they are willing for a six-month trial.
The Union petroleum ministry has been taking a soft line on the strike though the state government threatened to take tough action. Deora met representatives of the retailers from Maharashtra as well as from the Federation of All-India Petroleum Traders (FAIPT) and urged them to call off the strike so that consumers are not inconvenienced.
He reportedly spoke to Maharashtra Chief Minister Vilasrao Deshmukh while Patel spoke to state Finance Minister Jayant Patil before giving the dealers an assurance.
A source said the dealers were told that no action would be taken against them if there was loss of product due to shrinkage within a reasonable limit. Deora’s ministry has commissioned the Indian Institute of Petroleum to study 240 outlets and issue guidelines for shrinkage allowance.
Indian Oil Corporation chairman S Behuria told the dealers that the oil-marketing companies would try to share commission on compressed natural gas sales. Mahanagar Gas Ltd and Indraprastha Gas Ltd give the companies a commission to use their petrol pumps to dispense CNG.
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