Higher prices of petrol and diesel in the state of Punjab compared to other states aren’t just affecting customers, but they are also proving to be a barrier for many fuel stations, whose survival is in jeopardy due to a drop in sales volume.
“For long-term sustainability, a fuel station should sell 100 KL of fuel every month on average.” In Punjab, however, 72 percent of fuel outlets (2,492) sell fewer than 100 KL every month. According to Gurmeet Monty Sehgal, spokesperson for the Petrol Pump Dealers Association Punjab, “721 fuel stations (21 percent) have an average sale volume of less than 36 KL.”
The fuel station operators attribute the drop in sales on the state’s large concentration of petrol pumps and higher VAT on gasoline and diesel. Punjab has 3,460 public sector oil marketing companies’ fuel stations, including IndianOil (1,848), Bharat Petroleum (680), and Hindustan Petroleum(932). The VAT rate in Punjab is 35.25 percent for gasoline and 16.82 percent for diesel.
