Cheaper fuel in Karnataka drives fuel stations in Kerala's Kasaragod to the brink

Diesel sales slump 30% in the district; pumps on highway and border areas see sales plummet by 75% to 90%

Published: 07th April 2022 02:58 PM  |   Last Updated: 08th April 2022 07:58 PM   |  A+A-

Petrol price hike, Petrol pump, Petrol price

For representational purposes. (File Photo | PTI)

Express News Service

KASARGOD: Fuel stations on National Highway 66 and those on the Karnataka borders in Kasaragod district are reeling from price disparity between Kerala and Karnataka.

Sales of petrol and diesel in the district have slumped by 25 to 30%, said dealers. "But those on the highway and on the borders are affected the most," rues Moosa Cherkalam, state secretary of All India Petrol Pump Dealers Association.

When compared with Kasaragod, petrol is cheaper by nearly Rs 6 per litre and diesel is cheaper by Rs 8 to Rs 9 per litre in Mangaluru. Diesel in Mahe is cheaper by Rs 10 and petrol is cheaper by around Rs 11.

Commercial trucks delivering goods till Kochi from other states have almost stopped filling their tanks in Kerala, said K Lakshminarayanan, district treasurer of the dealers' association.

His fuel station on the highway near CPCRI used to sell 10,000 litres of diesel every day when the price differences between Kerala and Karnataka were negligible. Since November 2021 -- when the government of Karnataka slashed taxes on diesel and petrol by Rs 7 -- the sale at his fuel station has slumped. Lately, his pump has been selling only 2,500 litres of diesel a day, he said.

Trucks entering Kerala from Karnataka fill their fuel tanks (300 to 400 litres) and top up again in Mahe, he said. "They don't have to buy fuel in Kerala at all," he said.

Fuel stations on the highway get 60% of their business from commercial vehicles, particularly interstate trucks. "In terms of sales of fuel, 10 trucks get us more business than 200 passenger cars. The price disparity has almost killed our business," he said.

Lakshminarayanan's fuel station near Kasaragod town is 30km from the Thalappady border, so his sales have slumped only 75%. Right on the border at Thalappady, there is Kerala Fuels. Its sales have slumped 90% since November 2021. On average, it used to sell 12,000 litres (one load) of fuel (4,000 litres of petrol and 8,000 litres of diesel) every day. Now, it barely manages to sell three loads (36,000 litres) in a month. "It is on the verge of closure," said Lakshminarayanan.

Fifty metres inside Karnataka, there is a fuel station that always has a long queue. It has put up a board highlighting the price differences between Kerala and Karnataka. On average, it sells two loads (24,000 litres) of fuel every day.

To be sure, the LDF government has not increased its share of tax since it came to power in May 2016. But neither has it reduced that VAT, which is 30.08% of the rate at which petrol is delivered in Kerala. So every time the Union government increases the fuel price or the tax, the Kerala government's income from fuel also increases. In the past 12 days alone, the Union government increased fuel prices by 11%, tweeted Abdulla Madumoole, an Abu Dhabi-based financial consultant, who owns a fuel station at Perla in Enmakaje, another border panchayat.

Apart from commercial vehicles, the truck-mounted borewell rigs are also filling up their tanks from Karnataka. The truck-mounted rigs buy 1,500 litres to 2,000 litres at a time. They need around 300 litres of diesel to drill one borewell. They find it economical to buy diesel from fuel stations on the border.

Lakshminarayanan said the infrastructure companies working on the highway widening also bring in diesel in their private tanker from Karnataka. "They are saving Rs 8 per litre," he added.

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