Diesel mafia hampering State revenue, say traders

Traders claim the diesel mafia is undermining Andhra Pradesh's revenue by sourcing fuel illegally from other states, harming licensed dealers.

The diesel mafia with multiple methods used to evade Value Added Tax (VAT) additional VAT and road cess, is not only affecting Andhra Pradesh’s revenue but also hurting licensed fuel dealers, according to petroleum traders.  

President of the Andhra Pradesh Federation of Petroleum Traders (APFPT) Ravi Gopala Krishna told The Hindu that bulk transportation to consumer outlets had emerged as a major concern. Consumer outlets are fuel dispensing points permitted at large project sites such as Amaravati works, industrial units, mining areas and stone crushing facilities. These outlets are mandated to procure diesel from suppliers within Andhra Pradesh to ensure tax compliance. However, some outlets were sourcing diesel from other States, including Gujarat, the Union Territory of Yanam and Karnataka, he alleged.  

“They are selling diesel at rates lower than the prevailing prices in Andhra Pradesh, even though their licences are meant only for captive consumption and not for commercial sale,” Mr. Gopala Krishna said.  

APFPT general secretary Peram Ravi Kumar alleged misuse of fuel bowsers, which can dispense 2 KL to 3 KL of diesel used for on-site supply. He said bowsers, permitted to supply diesel only to heavy machinery, were being misused to sell fuel to regular transport vehicles, causing revenue loss to the government and unfair competition for licensed dealers. Federation adviser P. Avinash Chand said there was no effective monitoring or enforcement mechanism for bio-diesel outlets in the State. Preventing unauthorised diesel sales would increase revenue and protect authorised dealers, he said. The federation leaders said they will take the issue to the notice of Chief Minister N. Chandrababu Naidu, seeking strict action to curb illegal diesel trade.  

Responding to the allegations, Chief Commissioner of State Taxes Babu A. told The Hindu that several preventive measures had been initiated from the department after meetings with dealers and Oil Marketing Companies. He said bulk transport vehicles meant to carry diesel to Yanam were being intercepted for unloading fuel illegally in Andhra Pradesh. Despite GPS tracking, some vehicles unloaded fuel within the State and then proceeded to Yanam to falsely indicate delivery, he said, adding that nearly 80% of such fraud had now been controlled. He further said the government had issued orders mandating contractors executing government works to procure petrol, oil and lubricants within the State and submit invoices accordingly.  

APFPT members said they had informed the Civil Supplies department about violations at consumer and bio-diesel outlets and hoped that a joint enforcement committee would address the issue.