With the road transport sector already impacted by the financial breakdown and economic stress due to the lockdown, the industry has now been adversely affected due to the diesel price hike.
With the transporters freight under pressure due to high operating costs and demand-supply forces, the All India Motor Transport Congress (apex body of trucking industry) has demanded roll back of the diesel price hike as it is making their operations unviable.
Oil Management Companies have been increasing prices of petrol and diesel, now 10th day in a row. Further, the Central government has increased excise duty twice on both the fuel, petrol and diesel. State governments have hiked cess, with Madhya Pradesh Govt levying Corona Cess.
According to the All India Motor Transport Congress, agriculture and commercial vehicles account for about 60% of diesel consumption, both of which have working capital issues due to the lockdown.
About 70 percent of the retail price of fuel constitutes the Central & State Taxes, which in turn is about 275 percent and 255 percent on petrol & diesel respectively over the base price.
"There is still not enough demand and about 65-70% of the vehicles are still off the roads. The operating cost has increased exorbitantly with diesel price hike, toll, corruption and statutory financial obligations," says Kultaran Singh Atwal, President, AIMTC.
As economic activity is resuming slowly, several truckers are losing out on return trips as they return with empty trucks which incurs higher cost. Without return loads the vehicles are increasingly coming to a standstill. Acute financial crisis is driving small operators out of business.
Faced with several shortage in working capital, transporters are unable to pay EMIs and interest. AIMTC claims there has been harassment by bank officials threatening the vehicle owners for seizing the vehicles.
"With about 70 percent of the transport sector down, there is a strong possibility that economic revival will take 7-8 months to get back on track," says Atwal.
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