Cabbies bay for fare hike

State slashes VAT on jet fuel

Mumbai: Even as the Maharashtra government moved swiftly to cushion the aviation sector by slashing Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 18 pc to 7 pc, sections of Mumbai’s cab unions demanded an immediate fare hike following the latest increase in compressed natural gas (CNG) prices by Mahanagar Gas Limited (MGL).

The VAT reduction on jet fuel will remain in force for six months - May 15-Nov 14 - vide an official notification issued today.

The move is expected to provide substantial relief to airlines battling spiraling operational costs amid fears that the escalating West Asia crisis could further disrupt global fuel supplies and inflate energy prices.

The MGL hiked retail CNG prices by Rs 2/kg across the Mumbai Metropolitan Region (MMR), citing turbulence in global energy markets triggered by the ongoing conflict in West Asia. This hike will hit nearly 4.8 lakh autorickshaws, around 1.5 lakh taxis, and over five lakh private vehicles dependent on CNG across Mumbai, Thane and Navi Mumbai.

Fuel Expenditure

The Mumbai Rickshawmen’s Union (MRU) claimed that the increase has pushed up fuel expenditure from Rs 17.14/km to Rs 18.17/km, significantly raising the daily operational burden on drivers already struggling with rising maintenance and household expenses.

Accordingly, the MRU sought a fare revision of Re 1/km for autorickshaws and Rs 2/km for taxis to offset the additional fuel burden. “The latest CNG hike has brought fresh distress for drivers who are barely surviving. Running costs have increased sharply and fares must be revised accordingly,” a union representative said.

However, not all unions were in agreement with this stand. Swabhiman Taxi-Rickshaw Union (STRU) President K.K. Tiwari and Akhil Maharashtra Kamgar-Karmachari Sangh (AMKKS) President Gaurishankar Singh tread cautiously, warning that another fare revision could backfire and alienate commuters already hit by inflation.

“Cab fares were increased only last year. The government is unlikely to approve another hike so soon, especially when ordinary citizens are already burdened by rising prices,” Tiwari told ‘The Perfect Voice’.

He contended that the Rs 2/kg increase in CNG would translate into an additional burden of roughly Rs 8/day for an autorickshaw driver, which they could absorb for the time being. “If we insist on higher fares now, commuters may simply shift to app-based aggregators like Ola and Uber,” he cautioned.

Singh said a joint panel comprising officials from the Brihanmumbai Municipal Corporation (BMC), Regional Transport Office (RTO), Traffic Police and transport unions would examine the impact of the fuel hike and assess other economic and operational factors before taking any decision on fare revision.

The revised CNG rates - Rs 82/kg to Rs 84/kg - directly affecting nearly 12.8 lakh CNG-powered vehicles across the MMR and the increase of around Rs 3/litre in petrol and diesel prices, further depressed household budgets with concerns of triggering fresh inflation.

The rapid developments unfolded barely days after Prime Minister Narendra Modi appealed for austerity and frugality in public and private expenditure amid uncertain global conditions.

However, ordinary citizens are now grappling with higher transportation costs, rising fuel bills and escalating prices of daily essentials - even as airlines prepare to somewhat benefit from lower taxes on jet fuel.

Naidu pats Fadnavis

Maharashtra’s decision to slash VAT on ATF drew praise from Civil Aviation Minister K. Rammohan Naidu, who complimented Chief Minister Devendra Fadnavis for the timely intervention.

The appreciation came even as some other states, including Tamil Nadu and Delhi, have reportedly raised duties on jet fuel. Naidu noted that state-level VAT on ATF constitutes a major component of airline operating expenses, and Maharashtra’s decision would bring relief to the aviation industry at a critical juncture.

Highlighting Maharashtra’s soaring strides in aviation, the union minister pointed out that the state’s 16 operational airports collectively handle nearly 75 million passengers annually.

Naidu said the cut in VAT on ATF would help airlines manage operational costs more effectively and prevent sharp spikes in airfares despite rising international fuel pressures.

“I hope that the few states where the Congress continues to be in power - Karnataka, Kerala and Telangana will also look into this (ATF) issue and take up the challenge of undertaking pro-people measures.”

Piyush Goyal, Union Minister, Commerce