Andhra Pradesh Treasury which is already burdened by a deficit budget is resulting in more losses due to the decrease in petroleum prices. After the state is bifurcated, the crude oil barrel rate is down from $110 to $63 and the state government is 400 Crores loss this year in the form of taxes.
Highest taxes are in place in Andhra Pradesh on Petrol. As a result vehicles in the borders are filling the petrol in neighbouring states and coming to AP which is resulting in drastic fall in Petrol sales here.
With international crude prices all set to deplete further, government needs to immediately lower the taxes than the neighbouring states so that sales will improve here and the revenue loss in the form of taxes will be covered through the high sales volume. Currently, Karnataka is adopting similar policy and is yielding good results.
