June 27, 2011 / 18:48 IST
Road freight rates and bus fares are likely to go up drastically in Gujarat due to recent hike in prices of diesel announced by the Centre coupled with high VAT rates.
The reluctance of Narendra Modi-led BJP government in withdrawing cess on LPG cylinders and reducing VAT on other petroleum products has hit hard the poor, common and middle class of people in the state.
Mukesh Dave, Secretary of Akhil Gujarat Truck Transport Association (AGTTA) said, "Due to lower VAT rates in the neighbouring states, the cost of diesel there is atleast Rs 4 less than Gujarat."
Because of increased fuel costs and a rise in other operating expenses such as insurance, toll, vehicle interest rates and driver expenses, the road freight rates have already started ballooning by around 10-15% on routes in and outside the state, he said.
There will be a near 15% hike in freight rates after the diesel price rise. The diesel price hike has prompted road transport operators to hike freight rates which, they fear, may add to inflationary pressures.
Transport operators in Gujarat, who run trucks to various destinations across the country, have hiked, or are in the process of increasing, freight rates by an average of about Rs 1.30 per km.
Because of this increased freight hike, the prices of vegetables coming to state from other parts of the country, has also gone up considerably.
Meghji Khetani, Vice President, Akhil Gujarat Vahan Sanchalak Mandal said the increase in price of diesel by Rs 3 a litre will have an impact on private buses operating in the state. It plans to increase bus fare by Rs 10 upto 200 kms, Rs 20 upto more than 200 kms and Rs 50 outside the state, he
said.
There are a large number of private buses in Gujarat. On an average, a bus uses around 100 litres of fuel a day. Adding State taxes, the effective hike in diesel will be more than Rs 3.5 a litre. BJP-ruled Gujarat has one of the highest taxation rates for fuel. The Gujarat State Road Transport Corporation
(GSRTC) a Gujarat government promoted body, a loss making body is thinking to increase the bus fare by Rs 3 per km and will aproach state government to grant permission to hike the bus fare inview of Rs 3 hike in prices of diesel.
The daily consumption of diesel by GSRTC buses running on different routes of the state and outside state is 6 lakh litres. The hike in prices of diesel will put an additional burden of Rs 18 lakhs on GSRTC.
Khangi (Private) travel agents operating truck on daily basis, plan to increase rate by Rs one per kilometer and car operator increasing rate by 0.50 paise per km.
Arjun Modhwadia, President, Gujarat Pradesh Congress Committee has strongly criticised Modi for not withdrawing cess on LPG cylinders and reducing VAT on LPG and other petroleum products.
He gave example of Congress led government in Hariyana deciding to reducing VAT and doing away with cess on LPG and kerosene for giving relief to the people.
"Such relief can not be expected from Modi who is known for protecting the interest of corporate houses at the cost of farmers and common people," he said.
Even Modi's erstwhile ministerial and party colleague Nalin Bhatt has criticised Modi on this issue. The prices of edible has gone up by Rs 400 per tin in the state in the past couple of months and Modi is quiet on taking action against Teliya Rajas (edible oil kings), charged Bhatt.
