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.

Class of Motor Vehicles	Rate of quarterly tax for Motor Vehicles fitted with pneumatic tyres (in Rs)
Goods Vehicles
Vehicles not exceeding 300 kgs in laden weight	424.20
Vehicles exceeding 300 kgs but not exceeding 1000 kgs in the laden weight	529.20
Vehicles exceeding 1000 kgs but not exceeding 1500 kgs laden weight	741.30
Vehicles exceeding 1500 kgs but not exceeding 3000 kgs laden weight	847.35
Vehicles exceeding 3000 kgs but not exceeding 4500 kgs laden weight	954.45
Vehicles exceeding 4500 kgs but not exceeding 5500 kgs laden weight	1272.6
Motor Vehicles plying for hire and used for transport of passengers
Vehicles permitted to carry not more than 4 persons	105
Vehicles permitted to carry more than 4 persons but not more than 6 persons	326.55
Three wheeled vehicles permitted to carry (7) persons in all for every person other than the driver	200
Vehicles permitted to carry 7 persons in all and covered by All India Taxi Permits	652.05

 

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.

Vehicle Category	Monthly Tax Rate	Monthly Expenditure for diesel (March 2020)	Monthly Expenditure for diesel (2nd July 2020)	Monthly EMI (if opted for Moratorium)	Total Monthly Expenditure (March 2020)	Total Monthly Expenditure (September 2020)	Expenditure Post COVID
Values in Rs
Goods Vehicles
Vehicles not exceeding 300 kgs in laden weight	141.4	8151.5	9365	7084	15377	16590	11908
Vehicles exceeding 300 kgs but not exceeding 1000 kgs in the laden weight	176.4	9042	10388	9634	18852	20198	15005
Vehicles exceeding 1000 kgs but not exceeding 1500 kgs laden weight	247.1	9795.5	11253	11822	21865	23322	17695.6
Vehicles exceeding 1500 kgs but not exceeding 3000 kgs laden weight	282.45	19111.5	21955	12279	31673	34516	23538.95
Vehicles exceeding 3000 kgs but not exceeding 4500 kgs laden weight	318.15	26715	30690	12657	39690	43665	28320.15
Vehicles exceeding 4500 kgs but not exceeding 5500 kgs laden weight	424.2	29729	34152	17001	47154	51577	34501.2
Motor vehicles plying for hire and used for transport of passengers
Vehicles permitted to carry not more than 4 persons	32	8905	10230	4156	13096	14241	9306
Vehicles permitted to carry more than 4 persons but not more than 6 persons	108.85	14933	17155	8501	23543	25765	17187.35
Three wheeled vehicles permitted to carry (7) persons in all for every person other than the driver	66.67	8905	10230	8501	17473	18798	13682.67
Vehicles permitted to carry 7 persons in all and covered by All India Taxi Permits	217.35	41100	47214	26409	67726	73840	50233.35

 

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.