Petrol prices in Goa plunge, cheapest in the country at Rs. 54.96

www.mangaloretoday.com

Panaji, April 3, 2012: Long queues were witnessed near petrol pumps throughout Goa after Manohar Parrikar government slashed the petrol prices by Rs 11 since Monday.

The petrol pumps ran dry by afternoon owing to mammoth rise in customers forcing the petroleum firms to send additional tankers at various fuel stations.

The situation is expected to normalise by evening. The Goa government has brought down 22 percent VAT on petrol to just 0.1 percent pulling down the prices. A litre of petrol now costs Rs 54.96 as against Rs 65 per litre priced till Sunday.

The vendors at the petrol stations stated that majority of the people were topping up full tanks which drained the stocks within hours of the opening of the station. Cars were queuing on the road to get into the petrol station, causing a problem for other road users.

There were serpentine queues of the two-wheelers too, which had chocked the traffic further.

"There were queues even before we came here at 7 am to open the station. This was not expected. People should know that the reduction in prices is not just a day-long phenomenon. This should stop this panic-buying," the vendor commented.

Goa Petrol Dealers Association President Paresh Joshi said the scarcity of fuel was a temporary phenomenon.

"People were waiting for today to fill the petrol as it would cost cheaper. Also several fuel stations had not accepted the stock on Saturday as they will have to bear the Value Added Tax (VAT) on it," he said.

Chief Minister Manohar Parrikar had said he was ready to abolish entire VAT on petrol but negligent 0.1 percent is retained to know the quantum of petrol sold in the state.

Money collected from 0.1 percent VAT will also be utilised to fund the monitoring mechanism on the borders to ensure that there is no smuggling of the fuel to neighbouring states.

The BJP in its manifesto for March 3 elections had promised to slash the petrol prices. The assurance was fulfilled in the state budget presented on April 26.

On 30th/31st and 15th of every month, they use the average price of international benchmark and foreign exchange rate in fortnight to decide what should be the price of fuel from 1st and 16th of every month respectively.

Oil firms hadn’t revised prices Sunday and are looking at doing so today.

Global gasoline prices (against which domestic petrol prices are benchmarked) have risen from USD 109 a barrel at the time of last revision in December to USD 134 per barrel.

Oil firms had last revised dates on December 1 when rates were cut by Rs 0.78 per litre. Petrol at IOC pumps in Delhi is currently priced at Rs 65.64 per litre and the rates vary by a couple of paise at the pumps of BPCL and HPCL.

IOC, BPCL and HPCL use fortnightly average of benchmark oil price and exchange rate to fix the price to be paid to refineries on 1st and 16th of every month.

If the changes do not reflect in retail selling price, they become losses in the books of oil firms.

Petrol price was freed from government control in June 2010, but public sector companies continue to informally consult their parent Oil Ministry before taking a decision.

Oil firms lost about Rs 4,500 crore this fiscal on selling petrol below cost. The government does not compensate them for this loss as petrol is a decontrolled commodity.

The government continues to control rates of diesel, domestic LPG and kerosene which were sold way below cost to keep inflation under check. The oil firms lose Rs 16.16 per litre on diesel, Rs 32.59 a litre on kerosene and Rs 5d70.50 per 14.2-kg LPG cylinder.

The government makes up roughly half of the cost that retailers lose on selling diesel, domestic LPG and kerosene below cost.

IOC, BPCL and HPCL together are projected to lose about Rs 20,800 crore this fiscal on selling diesel, domestic LPG and kerosene.

Courtesy: Zee News