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Bhutan cheaper fuel – Assam residents visit border town

Rising fuel costs has gotten its fair share of attention, and is now a noticeable thorn that we don’t know how to deal with. For those residing close to the Bhutan border in Assam, a trip across the border helps arrest fuel expenses because that means access to Bhutan cheaper fuel.

While the seriousness of the matter is yet to be tabled for unilateral discussion, a small group of individuals has found a solution. As of last week, Dhrubajyoti Goswami said, ‘Petrol Price in Guwahati is now 75/- & Diesel is Rs. 64/- and a BEER is Rs.140/-.’

‘But we NALBARIA have the solution..Just Cross over Bhutan International Border & get Full your Tank….
Petrol @ Rs. 52/- & Diesel @ Rs. 39/- …. Also Take 2 BEERS @-Rs. 120/-.’ To add some cheer to the message, he informed, ‘Dont worry.. NO VISA REQUIRED.’

It’s no surprise then that folks are crossing the border to buy daily consumption fuel and liquor. The price benefit is a great motivator with petrol and diesel retailing at twenty bucks lesser, even more.

A litre of petrol costs around Rs 52 in Bhutan as opposed to Rs 76 in Assam, while diesel costs nearly Rs 20 less. Bhutan-made beer comes for Rs 60 a can, Rs 20 cheaper than the Indian equivalent and premium scotch for less than Rs 2000. With currency valuation of Indian Rupee (INR/Rs) equivalent to Bhutanese Ngultrum (BTN), and border areas accepting both currencies freely, it’s not difficult to see why people wouldn’t cross over for daily purchases.

Indian Oil, and Bharat Petroleum supply petrol and diesel to Bhutan. Since GST implementation from July 1, 2017, exports to Bhutan from India are zero rated. Excise duty on petrol and diesel levied is refunded to Bhutan. Excise duty exemption on fuel imports to Bhutan at source have equated to 17% reduction in petrol and 14% cut in diesel prices in Bhutan.

Resultantly, Bhutan’s revenue collection has reduced for the happy country has elected to pass on benefits to consumers over increased taxes to compensate revenue loss. While fuel volumes under consideration are small, it nevertheless does tantamount to trade diversion, and the matter is being brought to the notice of Indian Oil Corporation Limited (IOCL).

With BJP coming into power in 2016, and GST implementation in 2017, all inter-state (Assam) check gates ceased to exist as there’s no entry tax under GST. The move also aimed to curb corruption at border check posts since all transactions are online, which means no checks are possible in the absence of check posts. GST council committed to compensation for any revenue loss suffered by the state government owing to abolition of central sales tax. Tax growth was estimated to be up by 14 per cent under the GST.

The only restrictive measure in practice is from the Bhutanese end. Since, fuel was being transported and sold in border areas for a profit, for now, Indians can only buy Bhutan cheaper fuel worth upto Rs 500 per person.

Back in December 2015, Supreme Court passed a ruling that banned registration of luxury automobiles and sport utility vehicles with an engine capacity in excess of 2000cc in NCR. The move aimed at curbing air pollution in NCR thought to be brought on by emissions by diesel vehicles.30 months on, and Delhi, Gurgaon and multiple cities in north India still top the list of world’s most polluted cities.

Sales of petrol engine passenger vehicles and two wheelers have seen an increase in recent months. This has increased the consumption of petrol. Consumption of fuel has been increasing over the last few years.

If we compare, diesel consumption surged 14% during the month of August 2016, petrol consumption increased substantially by 25% during the same period. This resulted in a surge in petrol consumption which reached a 5 year high in July 2016, while diesel consumption surged primarily due to increased commercial transportation.

Fuel products sales improved 5.3 percent in April-March FY2018. Besides petrol and diesel for vehicular consumption, consumption of other industrial and commercial fuels also saw a surge in demand. These included fuel oil, petcoke and aviation turbine fuel. This increased demand indicates improved economic activity. Even as petrol and diesel demand increased, kerosene consumption declined. Consumption of Liquefied Petroleum Gas surged 8% YoY.

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