VIJAYAWADA: With petrol touching Rs 113.03 per litre and diesel crossing Rs 100.70, Andhra Pradesh has once again emerged as the costliest States in the country for fuel consumers, largely due to high State-level VAT and local cesses.
Even before the recent Rs 3 hike approved for Oil Marketing Companies (OMCs), fuel prices in Andhra Pradesh remained significantly higher than neighbouring Telangana, Tamil Nadu, Karnataka, Odisha and Kerala. Industry representatives and transport operators argue that the State’s taxation policy has kept fuel prices elevated for years, increasing the burden on households and businesses alike.
For every litre of petrol priced at around Rs 109 earlier, consumers paid only about 42-45 per cent towards the base fuel cost. Around Rs 19 to Rs 22 went towards Central excise duty, Rs 2.84 as dealer commission, while more than Rs 26 was collected through State VAT and local cesses, including road cess.
The latest increase has triggered fears of another round of inflation. Economists and trade bodies warn that rising fuel costs will directly affect transport, agriculture, manufacturing and retail sectors, eventually pushing up prices of essential commodities.
According to industry estimates, middle-class and low-income families may now spend nearly Rs 1,000 extra every month on fuel and related expenses. Transport operators and small industries expect their monthly operating costs to rise between Rs 5,000 and Rs 10,000.
Daily commuters using two-wheelers and cars say household budgets are already stretched by rising grocery bills, electricity charges and school fees. Auto-rickshaw drivers and cab operators fear shrinking earnings as higher fuel costs eat into daily income. Public transport is also under pressure. Andhra Pradesh State Road Transport Corporation (APSRTC), which relies heavily on diesel, is expected to incur an additional expenditure of nearly Rs 25 lakh every day following the diesel price hike. Officials estimate the burden could rise to Rs 7.5 crore per month and nearly Rs 90 crore annually.
Speaking to TNIE, Andhra Pradesh Chambers of Commerce and Industry Federation president Potluri Bhaskar Rao said repeated appeals to reduce VAT on diesel had gone unanswered. He pointed out that many transporters and motorists living near State borders now prefer to buy fuel in neighbouring States where prices are lower. “If the State had reduced VAT even marginally, it could have reduced the burden on consumers and prevented revenue leakage,” he observed.
Transport unions have also warned of a likely increase in freight charges in the coming weeks. This could affect prices of vegetables, milk, groceries and construction materials.
Andhra Pradesh Lorry Owners Association president Eswara Rao said short-distance transport operations would face the biggest impact. He also expressed concern over reports that fuel prices could rise further in the coming months.
Manufacturing units, farmers dependent on diesel transport and small businesses fear that higher logistics costs will reduce profit margins and disrupt supply chains. With West Asia tensions continuing to push up global crude oil prices, consumers across Andhra Pradesh now fear that fuel costs — and inflation — may climb even higher in the months ahead.
