Transporters seek fuel VAT cut amid slowdown concerns

Indore: With nearly 25-30 percent of commercial vehicles already lying idle due to weak cargo movement and sluggish business activity, transporters in Madhya Pradesh have urged the state govt to reduce VAT and other levies on diesel and petrol following the latest fuel price hike.

From Friday, fuel prices increased by around Rs 3 per litre in Indore, pushing petrol rates to Rs 109.81 per litre and diesel to Rs 95.02 per litre. Transport operators said the increase comes at a time when the sector is already struggling with low freight movement and weak market demand.

In a representation submitted to chief minister Mohan Yadav, transport associations said Madhya Pradesh imposes higher VAT and additional taxes on fuel compared to several other states, increasing operational costs for transporters and indirectly affecting businesses and consumers.

CL Mukati, president of the Indore Truck Operators and Transport Association, said the transport industry is already under severe stress. “The sector is passing through a difficult phase due to weak demand and reduced freight movement. Any further increase in diesel prices will significantly raise operational costs and put additional pressure on transporters, especially small and medium operators,” he said.

Transporters said commercial vehicle utilisation has declined across the state over the past several months because of weak demand and lower freight availability. Associations warned that rising diesel prices could make it difficult for vehicle owners, particularly small fleet operators, to pay EMIs and continue operations.

The fuel price rise comes amid volatility in global crude oil markets triggered by geopolitical uncertainties and tensions in the Middle East that have affected supply chains.

Industry representatives cautioned that prolonged stress in the transport sector could have wider economic consequences, impacting supply chains, industrial activity, agriculture and prices of essential commodities.

Transporters have sought immediate intervention from the state government, arguing that reducing VAT and cess on fuel would provide relief to the sector and help support broader economic activity.