Fuel outflow affects country’s balance of payment


Indians from across Samdrup Jongkhar having their fill

Post INR-crunch, Indians, especially having vehicles and living in the border towns are milking the cow while they can. With an abundance of Ngultrum in their custody, they pass into Bhutan and buy fuel paying in BTN while many of them hoard diesel and petroleum in jerry cans and containers, take the petroleum products back home and sell them so they are replenished with Rupee.

Secondly, fuel in India is costlier compared to Bhutan so to exacerbate the situation of Indians selling fuel from the country to their counterparts, the INR crunch has added a new dimension to the scenario.

On an average, fuel prices for petrol and diesel in India are higher by 18.9% and 9.4% respectively, which encourages the Indian residents in border areas to purchase fuel from Bhutan. This has had an impact on both trade and Balance of Payment (BoP).

In Gomtu, the rate of petrol is Nu 58.54 and diesel is between Nu 39.22 to 39.24. Damchen Petroleum in Gomtu deals only in diesel and it has seen an increase in sales up to 12,000 liters a day; earlier, it used to sell about 8,000 liters a day.

The other petrol station in Gomtu, Tashi’s Bhutan Oil Distribution (BOD) deals both in diesel and petrol. It too has seen an increase in sales but on a smaller scale. It sells 2,000 liters of both diesel and petrol while earlier sales would touch 1,000 liters each.

About 15 days back, the BOD used to sell petrol and diesel to the Indian buyers in barrels and jerry cans but stopped the practice after being informed by the customs’ authority to curb the practice.

Meanwhile, in Samtse, the petrol rate is Nu 58.72 and diesel  rate is Nu 39.39.

Samtse’s Damchen Petroleum sales have shot up from 2,000 liters of diesel a day to 5,000 liters. And earlier, the pump used to sell about 1,000 liters of petrol in a day; now, it has increased to 3,000 liters. Most of the buyers are Indians taking fuel in jerry cans for fueling their vehicles that are parked at the border gate.

In Gelephu, the rate for petrol is Nu 58.21 and for diesel Nu 39.09.

Earlier, Druk Petroleum in Gelephu used to sell 2,500 liters of diesel a day; now sales figures have shot upto 4,000 liters. And petrol, which used to sell around 700 to 800 liters a day now sells up to 2,000 liters.

However, with the trade department’s recent order to stop this practice, sales have seen a

slight decline. In Samdrup Jongkhar, the petrol rate is Nu 58.46 and diesel rate Nu 39.54; however, the BOD in the dzongkhag has not seen any differences in sale which is about 30,000 liters of diesel and about 6,000 liters of petrol a day.

In Samdrup Jongkhar, the Indians come for petrol from nearby places like Daranga and Mela Bazaar. They come with jerry cans and barrels near the border gate to fill their vehicles.

Currently, the BOD has now restricted to giving only two jerry cans to each individual.

In Phuentsholing, petrol per liter costs Nu 58.54 and diesel Nu 39.22. The petrol pumps in Phuentsholing has seen a small increase from its earlier sales; for instance, Damchen Petroleum sales have gone up to 8,000 liters from the usual 7,000 liters a day.

E a r l i e r, Damchen in Phuentsholing used to supply about 100 to 150 liters of fuel to the Indians but now they too have stopped.

Following orders from the trade department not to supply fuel to Indians coming with containers and only to vehicles, the BOD in Phuentsholing has seen a fall in its fuel sales.

After the INR crunch, the fuel sale had increased to 8,000 liters but now, after the restriction it has reduced to 6,000 liters.

Petrol in Kolkata costs Nu 70.3 a liter and diesel comes at a cost of Nu 43.74.

In Guwahati, petrol costs Nu 69.12 and diesel Nu 42.34.

In nearby towns like Hasimara in Jalpaiguri, petrol costs Nu 67.79 and diesel Nu 42.58. The rates vary from town to town and state to state but the difference is very narrow.

The rupee task force report states that the import of fuel increased from 42.76mn liters (Nu 720.89mn) in 2002 to 111mn liters (Nu 4.25bn) in 2011.

With the import of vehicles and fuel increasing over time, this figure records fuel as one of the top 10 import commodities from India.

The report shows that from 2002 till 2011, about Nu 21.84bn was spent on import of fuel and Nu 7.90bn on import of vehicles.

With these factors in mind, measures have been proposed by the task force such as imposing a green tax of 5% on fuel imports.

According to the Prime Minister’s recent statement on television, fuel imports alone amounts to Nu 5.1bn out of the net rupee revenue of only Nu 7bn.

Trade Director, Sonam P Wangdi, denied that there was fuel depletion. “It is not an issue as it is not a rampant outflow,” he said. According to him, the trade authority had full accountability and checks of this matter.

“Whatever is being said right now is hearsay,” said Sonam P Wangdi. With the system being in place, he said that in the future, the department will be coming up with regulations on such practices and that there will be more enforcement on minimizing fuel outflow.

Meanwhile, Sonam P Wangdi said they were looking into equalizing fuel rates with the Indian neighborhood but that will be in accordance with what Parliament says.

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One comment

  1. The only way out of this crises and to avoid such mistakes in future is to punish all those officials involved,, they are given higher post such as director, secretary, minister, governer and they dont do their duty,, they always travel outside country and neglect or emphasis less impt in their duties and we public suffer.

    I think sonam p wangdi should be penalised for this,,, somebody has to take blame and it is him,, since he is the director of trade and it is his responsibility to see what is happening,, if they take promotion then they shuold also take demotion.

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