Diesel Crosses Rs 100 in MP, Demand For Tax Cut Grows

Bhopal: With the price of diesel, which plays a critical role in driving agriculture and the transport sector, crossing Rs 100/litre across the 52 districts of Madhya Pradesh (MP), inflation is likely to surge. 

In Anuppur district, the price of diesel touched the highest in the state at Rs 104.33 on Friday, followed by Rewa, Satna, Balaghat and Shahdol, where it crossed Rs 103. While in Bhopal and Indore, the fuel had breached the Rs 100 mark.

The price of petrol, which had crossed the three-digit mark in February, is Rs 112.07 per litre in Bhopal while diesel has become dearer by Rs 22/litre from Rs 78.29 in November last year. 

Besides affecting the general population, the steep rise in the prices of diesel will have a bigger impact on farmers, who use tractors, tiller and gensets, and the transport sector, which is recovering from the financial loss during the pandemic.

The increase in diesel rates is likely to make groceries, vegetables, fruits and other essential items dearer, and also affect daily commuters, school and college students and farmers who bring veggies from the outskirts of the cities with public and private transporters expecting, at least, 40%-50% hike in fares. Consequently, inflation will increase as well. The mom-and-pop store owners are expecting another price hike due to the continuing rise in diesel prices.

Public bus operators have already been demanding a hike in fares while those operating buses for schools and colleges are planning to increase fares by 50%. “We will be forced to hike the fare by almost 50%,” Shivkumar Soni, president, MP School Vahan Chalak Samiti, told Newsclick.

In September 2020, bus owners had demanded an increase in fares after diesel became dearer by almost Rs 26. “In April 2021, the government hiked bus fares by only 25% against our demand of 45%. The transporters are incurring a huge loss as diesel keeps getting more expensive,” said Govind Sharma, president, MP Bus Association. 

Thakurlal Rajput, member, All India Transport Companies Association, Bhopal chapter, told Newsclick that the government “seems to have completely ignored the interests of the common man. In the last year or so, we have been forced to increase transportation charges by almost 35% with diesel becoming costlier”.

Surrounded by five states, MP levies VAT of Rs 31.55 per litre on petrol, the highest in the country, and Rs 21.68 on diesel, the second highest after Andhra Pradesh. The surrounding states sell petrol and diesel Rs 3-Rs 10 cheaper. 

The state government earned more than Rs 24, 373 crore as taxes from the financial year 2019-20 till June 2021-22 from the sale of petrol and diesel. According to the data tabled in the Monsoon Session of the Assembly, MP earned Rs 10,037 crore from petrol and diesel as taxes in the 2019-20 fiscal, which surged to Rs 11,907 crore in the 2020-21 financial year despite the lockdown. And till June 2021, the total earning from taxes is Rs 2, 429 crore. 

The recent hike in fuel prices might impact the Bharatiya Janata Party’s (BJP) prospects in the by-polls on three Assembly and a parliamentary seat in Khandwa on October 30.

The common man is also feeling the pinch with the rise in the price of the domestic LPG cylinder, which now costs Rs 905 after the recent hike of Rs 15 on October 6. The price of an LPG cylinder has been hiked 11 times from Rs 594 since November last year. “There has already been a decline of 25% in sales with the margin of profit going down,” an LPG dealer in Bhopal told Newsclick.

Demanding an immediate reduction in the prices of petrol and diesel, former chief minister and Leader of Opposition in the Assembly Kamal Nath tweeted: “The skyrocketing prices of petrol, diesel, LPG and the rising inflation have broken the back of the common man.

In a series of tweets, Nath pointed out: “People are distraught while the government is busy in elections and has left people at the mercy of God. The opposition Congress will not be silent and protest this. We demand immediate relief to the people with a reduction in the taxes or else Congressmen will hold a state-wide agitation against the rising inflation.”  

Navneet Jha, a postgraduate journalism student who is feeling the pinch of inflation, said, “MP levies the highest tax on petrol and liquor in the country. It imposes the second-highest tax on diesel. With the recent increase in LGP prices, it has become costlier than in Delhi and Mumbai. The rate of edible oil has shot up to Rs 250/litre from Rs 120 last year. With the reduction in salaries, it is difficult to sustain.”

He pointed out, “Why can’t the Centre and the states include fuels under GST?”