Lakshmana Venkat Kuchi, Senior Journalist
@kvlakshman
In this case, the grass is definitely greener on the other side. With consumers opting to cross borders to buy cheaper petrol and diesel in Karnataka, many petrol pumps in the border areas Kurnool and Ananthapur in Andhra Pradesh had to shut shop.
Petroleum retail outlets in Ananthapur and Kurnool districts, close to Karnataka, ran up huge losses and closed operations. Petrol and diesel are sold at least Rs 8 to Rs 10 per litre cheaper in Karnataka owing to lesser state taxes.
Now this is a huge margin that Andhra dealers are unable to cover and are losing out to their Karnataka counterparts. Their volumes too are obviously low and uneconomic as marketing and sales activities, petrol station dealers in Ananthapur and Kurnool lament.
Kishore Kumar, president, Kurnool district Indian Oil Dealers Association, said that price difference has led to severe loss of business for many retailers who had to close down.
“The oil companies too refused to help the retail outlets and raise dealers commissions, he said and added “the commissions have remained at the same level as they were in 2017 while operational costs have increased.”
For people, it is natural to go to a dealer who gives a product cheaper. People living in border villages and transporters just go across the border for their fuel.
One may ask what is special in this, when similar differences exists between Noida and Delhi too.
Well here in Andhra, it is not just individual vehicle owners who are driving across for petrol and diesel, reportedly even few depots of State owned transport services too outsource cheaper fuel from some unscrupulous dealers.
Loss of sales and business forced some to opt out. Earlier a petrol pump owner used to buy 10 KL fuel at a cost of Rs 9,80,000 but these day buy just 200 liters and do some retail selling. For all practical purposes many were forced to close completely.
Many petrol dealers hope there would be price parity between states and this problem vanishes.
This price difference is not specific to fuel, even in liquor this is a significant factor. This is exactly the principle that operates in liquor trade between Delhi and Haryana.
In Ananthapur and Kurnool, bulk consumers are also buying fuel from Karnataka.
More important, this phenomenon is also leading to instances of smuggling of fuel.
Locals estimate some five truck loads of fuel entering the district stealthily on an average per day. Local authorities they their best to prevent, but to little avail, locals say.
(Lakshmana Venkat Kuchi is a senior journalist tracking social, economic, and political issues and takes a keen interest in sports as well. He has worked with prominent news organisations.)
