High fuel prices in India prompt smuggling
Pump prices are so high in India that some of the petrol and diesel exported to neighbouring countries is being smuggled back through porous land borders.
A tanker loaded with 1,360 litres of diesel that was being smuggled to India, where pump prices are at a record, was held last week in Nepal, the police said in a statement.
Pump prices of petrol, which have breached the ₹100 a litre mark in several parts of India, are the highest in the South Asian region, according to data compiled by GlobalPetrolPrices.com. That’s resulting in illegal trade as Indians grapple with soaring fuel prices. Ironically, Nepal gets all its petroleum fuels from India, which also exports to neighbours Bangladesh and Sri Lanka.
“Smuggling has become ram
pant as prices are cheaper in Nepal because of tax differentiation,” said Ravi Bharti, who operates a gas station at Adapur in eastern Bihar state, less than 2 miles from the Nepal border.
“This is severely impacting our sales.”
While the increase in pump rates is the result of a sharp recovery in the prices of global crude oil, taxes have remained stubbornly high, making up closer to 60% of what consumers pay in India.
Prime Minister Narendra Modi and his oil minister Dharmendra Pradhan have been fending off criticism by shifting the blame for high prices on previous governments and production cuts by some oil exporting nations.
Daily sales of petrol and diesel at his refilling station have dropped to 1,200 litres from 1,800 litres earlier, Bharti said. “Vehicles are now refilling from roadside vendors, who are selling the smuggled fuels much cheaper.”
Modi has drawn criticism for the rise in fuel prices, a politically sensitive subject, not only from his rivals but also from some members of his own Bharatiya Janata Party. India imports 85% of its crude oil requirements, making it the world’s third-biggest buyer.