Pune Municipal Corporation sits on move to slash octroi on fuel

While Puneites are suffering from repeated increase in petrol and diesel prices, no action has been taken regarding a proposal to reduce octroi on petroleum products. The general body of the Pune Municipal Corporation (PMC) is sitting over the proposal for a long time.

The standing committee of the PMC had approved a proposal on June 28 to reduce octroi on petrol and diesel from 2% to 1%, which would result in reduction in prices of these commodities by 60 paise and 45 paise per litre respectively.

The resolution was put on the agenda of the general body (GB) in July for ratification.

When July’s agenda was considered in the GB meeting, the resolution was not even taken up for consideration. In August also the resolution was not discussed.

The leader of house, Subhash Jagtap, told DNA that the resolution was not taken up as there was no written undertaking from the petroleum dealers that they would pass on the benefit of price reduction to the consumers.

“The purpose of reducing prices of petrol and diesel would be defeated if dealers do not reduce prices after reduction in octroi,” he said.

Keeping in mind the model code of conduct due to the by-election in Khadakwasla legislative assembly constituency, the resolution to provide relief in octroi cannot be passed in September’s GB meeting.

In the PMC’s budget for 2011-12, the expected revenue from octroi on petrol and diesel is Rs39 crore and Rs7 crore respectively. The civic body would face a burden of Rs25 crore together due to reduction in tax on these products.

The state government had fixed the band of 2% to 3% to levy octroi on petrol and diesel. As the civic body has proposed to reduce the tax to 1%, less than the permissible limit, the proposal would be required to be approved by the state government.