Rise in fuel prices add to the sorrow of truck and auto drivers across the State

The rise in fuel prices in Andhra Pradesh in the last 18 days is a cause of concern for the truck and auto drivers across the State. The lockdown has curtailed taxis and lorries (except for transport of essentials) to ply since March, affecting the earnings of the drivers.

The three-month lockdown period to contain the COVID 19 has severely affected thousands of goods and motor vehicle owners whose livelihood was dependent on transport. As soon as the transport services partially resumed in the State under unlock 1.0, the fuel prices have started increasing further affecting the vehicle owners. 

High Fuel Price

Before the lockdown, the price of Petrol is Rs. 74.60 per litre (as of March 2020), and the cost of the diesel is Rs. 68.50 per litre (as of March 2020). The price of petrol increased by Rs. 8.89 in the past 20 days, currently at Rs. 83.40 per litre. The cost of diesel increased by Rs. 9.69, now at Rs. 78.19 per litre. 

YSRCP government revised the Value Added Tax (VAT) twice between January to March 2020. At present, 31% VAT plus Rs. 2.76 per litre will be charged on petrol, 22.5% VAT, and Rs. 3.07 per litre will be charged on diesel. Andhra Pradesh is one of the States with the highest fuel prices because of the increase in State taxes. 

Quarterly Taxes

The lorry and taxi drivers face yet another problem with the quarterly taxes imposed by the AP government. As per the GO Ms No. 68 issued on 13th April 2006, quarterly tax rates to be levied on the various classes of the Motor Vehicles used or kept for use in a public place in the State. The below table contains the separate tax rates for the vehicles depending on the weight, passenger capacity and the kilometres travelled.

Adding to the fuel prices, and quarterly taxes, the goods and motor vehicle owners are further burdened with monthly EMI’s, which would increase if they opted for mortarium.

We have tried to assess the monthly expenditure for goods and motor vehicle owners before the lockdown (March 2020) and the impact of the lockdown on the earnings of these owners. For making these calculations, the following things are considered:

1. The monthly tax is calculated by dividing the quarterly tax rates by 3
2. On average banks issue loans for 80% of the principle cost with a 12% rate of interest
3. To calculate the monthly EMI, the loan repayment period is considered as 5 years
4. To calculate Moratorium, it is assumed that the person has paid already paid 12 EMI’s and availed Moratorium for 6 months (March to August 2020) keeping the loan repayment period same
5. To calculate the business post – COVID 19 outbreaks, it is assumed that the business has fallen by 50%, so the fuel price per month is divided by 2
6. The below calculations are exclusive of the maintenance charges since the vehicles have not been used for the 3 months.

The monthly expenditure for June would be less as the owners do not have to have pay EMI if they opted for Moratorium till August. So, the monthly expenditure from September is calculated. From the above table, the monthly expenditure between March and September have increased by 2,000 -4,000 on an average. The spending increased while the business for the goods and motor vehicle drivers decreased by 50%.

An average household with five members in the State earns around Rs. 14,126 per month. While the monthly expenditure is increasing, these families do not have any other ways to augment their income. With a lack of income, the drivers are finding it difficult to make ends meet. These families affected due to COVID are further affected due to the high fuel prices and the State government’s lack of apathy towards them. A lot of these families are taking debts to cover the monthly expenditure, because of which they end up paying more debts.

The State government should actively take steps to resolve the issues of the goods and motor vehicle owners and save them from the unending debts. The government should put pressure on the Centre to reduce the fuel prices, the VAT on the fuel should be reduced. The government should provide fuel to the vehicle owners at subsidized prices until the business gets back to normal. The government should relieve the vehicle owners from the quarterly taxes for the next six months. The State government should waive off the vehicle loans from March to August without affecting the drivers. A welfare fund should be constituted for the welfare of the goods and motor vehicle owners in the State. The onus is on the government to assist the drivers until the business gets back to normal.

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