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All India Petroleum Dealers Association, an independent national body that claims to represent more than 52,000 petrol pump owners, has demanded a uniform fuel price for petroleum products across the country. The said body has been in talks with various chief ministers and state finance ministers regarding their 'One Nation One Rate' demand.

The association claims that uniform fuel rate across the country will avoid disparity in fuel prices, thus making it easier to control. It further proposes to bring petroleum products under GST (Goods and Services Tax), so that fuel prices can be uniformed across the country.

Currently, every state in the country levies different VAT rates on fuel, which causes a disparity in retail prices in different states. The difference in petrol prices ranges from Rs. 1 to Rs. 7.50 per litre, while that in diesel prices varies between 60 paise to Rs. 4 per litre.

Source: ET Auto

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This is something which I have wondered since long. My father works in the tax department and often, I discuss (argue) with him why there shouldn't be any disparity in the prices of oil (and other commodities if possible). I believe, if implemented, this will be a welcome move.

Not expecting this to happen in near future! Need a strong political will which no party has currently. In fact things are moving the opposite way. Central government is thinking of giving the control of professional tax amount which is currently with the Centre to states so that each state can have their own professional tax :Frustrati

Why does the petrol pump owner association even care about this? Aren't there incomes fixed irrespective of the price? Or is just the owners who are close to state borders who are demanding this?

Frankly, IMO, it's fine the way it is. In US, states have control over IT too. A fixed portion goes as federal & another portion to state - with the state having complete control over it. So it's cheaper living in some states & expensive in others. Tries to take care of congestion. I think we too have something like that.

There are lots of places especially near State borders where people have a tendency to go to a pump which is having cheaper rates since it is just 3-4 km away. So the earnings are significantly lesser in these areas.

Case in Point Vapi and Dadra. Vapi is a part of Gujurat but Dadra is a Union Territory therefore it has a difference in fuel prices of upto Rs.5. So Vapi people will always go to Dadra which is just 2-3 km away from Vapi to fill fuel.

I agree 100%. What will happen to the usurious states like KA, MH etc. They fought vary hard to keep Alcohol and Petro products out of GST. Even though the original proposal was three years, but then we know these deadlines have a habit of getting extended indefinitely. Proof in hand, 10 years for SC/ST has been extended almost indefinitely.

Who is the end benefactor? Some states might benefit (read: KA, MH), some might lose out (DL, HR).

Won't GST resolve this to some extent?

+1

On NH4, towards the MH-KA border, every petrol pump in MH has huge banners that advertise petrol at Rs. 3/4 cheaper than in KA.

Yes, i am quite aware of this practice, but it seems only a small percentage of petrol pump owners are affected by this, whereas a large percentage of population (states where these are cheaper) will be affected by these being priced same all over.

I would say let few suffer over many. Maybe they should be appealing to their state to reduce VAT.

If this happens(and it's a big If), expect the highest rates for both Petrol and Diesel to be the agreed upon price across the nation :Frustrati

Many already commented on this but I would like to add one example:
The revenue of the petrol pumps in state border drops significantly as much as 40%. For example diesel in Andhra pumps is costlier by ~2.5 rupees more than Karnataka (This difference was ~4.5 rupees a while back, thanks to weird local state tax structure)

& if it's same, revenue for the other state at borders will drop by some percent. If the state, losing out at borders is so concerned, maybe they should reduce the taxes levied by it.

This demand is like a shopkeeper complaining that the other one is selling at a lesser price so no one's buying from me. Instead of being more competitive, he demands same pricing. Would you consider this across all segments & products?

While this is a welcome move but I am not sure because of the logistics charges involved in transporting the fuel to different parts of the country. More the distance (and taxes in the state) higher the price, isnt it?

I think there was a similar campaign for road tax as well (One Nation, One road tax or something similar) so that people could drive across states and register without having to pay the road tax there. WOnder what happened to that.

This is nothing but an effort to increase the fuel prices all over the country to same levels and make better commission for petroleum dealers.

Price differences are due to various reasons, transportation cost, taxes, even the landed cost of crude at different refinery is not same (again many factors contribute).

Even if all the state governments keep unified taxes, other contributing costs will still result in different prices in different places.

And yes, there are some dealers who operate (voluntarily) at lower margin than a neighboring dealer for the lure of higher business volume and overall higher profits.

May be OT. It's not just people from Vapi. Even when I leave for Dadra-Naroli from Ahmedabad. I fill only required fuel from here in Ahmedabad to reach there. Once in Union territory(Heaven), get a full tank & save about INR 300. That savings makes up for toll amount of return journey :)

Not true. Delhi is far off from any port and yet prices are among the lowest. Compared to that states with access to ports like Gujarat and Maharashtra have higher prices.

Offtopic but I doubt higher prices have anything to do with congestion. Take a look at Bangalore, high fuel prices and highest road tax. Yet the city is eternally clogged.