Himachal Fuel Dealers Oppose Petrol, Diesel Cess, Warn of Sales Decline
Bilaspur (HP), March 29: The Himachal Pradesh Petroleum Dealers Association has strongly opposed the state government’s decision to impose a cess on petrol and diesel, calling the move “unjustified” and cautioning that it could further reduce fuel sales across the state.Sales Drop Raises Industry Concerns
During a meeting held on Saturday evening, Association President Sukumar Singh Chande highlighted a significant decline in fuel sales over recent years. He stated that when Himachal Pradesh maintained a lower Value Added Tax (VAT) compared to neighbouring states, total fuel sales stood at 1.2 million kilolitres. However, by 2025, this figure had dropped sharply to 900,000 kilolitres.He warned that the proposed cess could accelerate this downward trend, as fuel operators may increasingly source petrol and diesel from neighbouring states, leading to economic losses for Himachal Pradesh.
New VAT Amendment Introduces Additional Cess
The Himachal Pradesh Assembly on March 23 passed the Himachal Pradesh Value Added Tax (Amendment) Bill, 2006. The amendment proposes an “Orphan and Widow” cess of up to ₹5 per litre on petrol and high-speed diesel.The association has raised concerns over the lack of clarity surrounding the implementation of this cess. Sukumar Singh Chande pointed out that the government has not provided clear data on the number of beneficiaries, such as orphans and widows, nor outlined a concrete plan for the utilisation of the funds collected.
Industry Calls Move Economically Risky
Members of the association described the additional levy, imposed on top of the existing VAT, as “suicidal” for the state’s economy. They warned that introducing such provisions without a clear framework could set a concerning precedent and lead to trade diversion to neighbouring regions.According to the association, any significant shift in fuel procurement outside the state would directly impact Himachal Pradesh’s revenue.
Delegation to Meet State Leadership
The association’s Shimla unit plans to meet the Chief Minister and the Governor to formally present its concerns. The delegation aims to highlight key issues related to trade impact, legal implications, and potential revenue losses.Legal Options Under Consideration
The association has also begun consultations with legal experts and indicated that it may pursue legal action if the matter is not resolved through dialogue with the government.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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