It’s a common practice for citizens to hop across borders in search of cheaper liquor. Now, Kerala vehicles are expected to drive over to Karnataka, Tamil Nadu and Mahe to tank up on fuel, after the State government introduced a social security cess of ₹2 for petrol and diesel in its recent Budget.
Petrol bunks in the bordering States are exultantly gearing up to reap the benefits of the proposed cess on petrol and diesel in Kerala, which will drive up diesel costs in the State to ₹98.53 and petrol to ₹109.71 — the highest in South India.
A meme that’s circulating on Whatsapp shows a fuel bunk in bordering Karnataka with a hoarding showing, ‘Welcome to Karnataka - where fuel is ₹8 cheaper’, to woo Kerala customers.
When Kerala government introduced the social security cess of ₹2 for petrol and diesel in the Budget, it led to a protest among the people and the Opposition parties demanding re-examining of fuel hike. The Opposition Congress is now staging a sit-in at the entrance of the Legislative Assembly.
M Radhakrishnan, Patron, All Kerala Federation of Petroleum Traders, told businessline that petrol bunks in the State are facing subdued demand with a 30 per cent drop in sales due to various factors, and the Budget proposal will make a further dent on sales, especially diesel from trucks and lorries that ply long distances.
Several fuel bunks bordering Karnataka, Tamil Nadu and Mahe have placed hoardings on discounted prices to attract customers from Kerala. Radhakrishnan said the implementation of cess will shift customers of cargo carriers with national permit to fuel stations in bordering areas, and the Federation is expecting a 40 per cent drop in sales. He added that petrol and diesel sales in Kerala are estimated at 1 crore litres per day.
According to him, the landing cost of diesel in Kerala is ₹74.22 per litre, and with various forms of taxes — both Central and State — the retail price could be over ₹20 higher. However, the sale of petrol will not have much impact other than those situated in bordering areas, he felt.
Considering the revenue erosion to the State exchequer following the Budget announcement, the federation urged the government to roll back the proposal for the benefit of the State’s economy.
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