Fuel price hikes may force transporters to suspend operations: AIMTC3 min read . Updated: 25 Jun 2020, 11:14 AM IST
AIMTC President has said that if the rollback of diesel prices is not done immediately, the road transport sector will have no option but to suspend operations.
Protesting rise in diesel and petrol prices, transporters' apex body AIMTC has said unbridled hike in fuel rates has made their operations unviable and threatened to suspend operations if the government fails to roll back the increase.
The All India Motor Transport Congress (AIMTC) represents about 95 lakh truckers and other entities.
"There is acute resentment among the road transport fraternity of India and we foresee major disruption in the offing. The road transport fraternity of India strongly protests against the historic hikes in diesel, that are brazen and are making operations unviable. It is resulting in large scale shutting down of operations, loss of livelihood in this sector," the AIMTC said.
Diesel price for the first time in living memory crossed the rate of petrol in the national capital on Wednesday. With 19th increment in prices in a row on Thursday, diesel now costs ₹80.02 per litre in Delhi as compared to petrol price of ₹79.92 a litre.
"If the rollback of diesel prices is not effected immediately the road transport sector will have no option but to suspend operations," AIMTC President Kultaran Singh Atwal said.
The AIMTC said about 65 per cent of the total trucks in the country are sitting idle due to spiralling fuel prices, corruption and no tangible relief to transporters, hit hard by Covid-19.
"In the present scenario, on the one hand there is economic slowdown, and there is no demand. To add to it rising fuel cost has increased operations costs by 20-25 per cent, and corruption on the highways...is taking a toll on this sector, leading to further idling of vehicles," Atwal said.
About 70 per cent of the retail price of fuel constitutes the central and state taxes, which in turn is about 275 per cent and 255 per cent on petrol and diesel, respectively over the base price, he added.
The transporters' body said diesel price accounts for about 65 per cent of the operating cost of a truck and now it has become difficult to sustain transport operations as hike in fuel prices have a cascading effect.
"Trucks, small fleet owners operations have now become more unviable due to daily fuel price hikes," it said.
The AIMTC said there has been no relief from the government to this sector post lockdowns and the high operating costs cannot be passed to consumers as is widely perceived as the freights depend on demand and supply forces.
"The daily fluctuations and variances in prices across the country could not be absorbed in freight and result in negative cash flow for the operators. The road transport sector is devastated due to back-to back lockdowns amid Covid pandemic and closure of economy. Demand is not yet normalised," the AIMTC said.
Citing an example it said if a vehicle is moving from Amritsar to Trivandrum, approximately 3,284 kms with fixed freight paid to trucker on per trip basis, the transit time is around 12 days during which the tank is refilled about 4-5 times.
"With diesel prices increasing on daily basis, the operating cost increase substantially but the same is not effected in the freight paid. As such most of the operations result in losses. The situation is same for contractual work, which are revised quarterly, semi-annually or annually.
"The road transport fraternity of India demand from the government to roll back of fuel price hike and rationalisation of taxes on fuel and uniform rate of diesel across the country besides monthly or quarterly revision in fuel prices," it said.
Earlier, the organisation had sought a minimum rescue package from the government saying that the truckers have been hit hard due to Covid-19 pandemic and resultant lockdown.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.