The newly elected Goa state government announced a massive cut in VAT on petrol in its budget. Chief minister Manohar Parikkar said the decision will help the common man who has been under pressure due to increasing petrol prices in India.
Now with the reduced Vat on petrol in Goa being effectively just 0.1 per cent, petrol buyers are swarming to petrol bunks in a hurry. Sales of petrol has nearly doubled as people who were waiting to buy petrol at a cheaper price rushed to petrol bunks.
Official reports on daily petrol sales in Goa show that sales which usually used to be around Rs.2 crores has gone up to close to Rs.3.5 crores. People have witnessed long queues at petrol bunks across the state. Most notable was the ones near Goa's borders with Karnataka and Maharashtra. Many people from Goa's neighbouring states are buying petrol in the state due to the massive difference in price.
Petrol prices in India have been increased several times in the past two years forcing many car buyers to switch to diesel cars. Fuel prices have been a major reason for car sales coming down in 2011. While many people have not purchased cars due to high bank interest rates and fuel prices, the millions of vehicle owners have been forced to buy fuel at higher prices.
The Goa government's decision to reduce VAT on petrol has come as a relief to vehicle owners. This is more welcome in the small state which has the highest per capita vehicle owners in the country.