Shipping Minister Sarbananda Sonawal also asked state governments to lower VAT on diesel used by the sector and make coastal shipping operations viable.
“The rising Fuel cost at international level is now making our local Roll on/Roll off passenger ferries operations unviable. So, this exemption of vessel and port related charges by Shipping Ministry will provide the necessary breather to this sector for the next six months,” Sonowal said in a statement issued on Sunday.
An official statement said that all 13 Major Ports of the country will exempt all berth hiring and vessel related charges being currently levied to the Roll on/Roll off passenger ferries for the next six months with immediate effect. This is expected to provide some quick respite to this sector from the impact of global increase in price of fuel.
It is estimated that the cost of Marine fuel or Low Sulphur High Flash High Speed Diesel (LSHFHSD) has increased from Rs 76,000 per kilolitre (KL) to Rs.1,21,000 per KL. Similarly, the cost of Very Low Sulphur Fuel Oil (VLSFO) has also increased from Rs 40608 per KL to Rs 80917 per KL.
“It is to be noted here that in the beginning of financial year 2021-22 the cost of marine fuel-LSHFHSD used to be 10-15% less than retail diesel. Hence, effectively the rise is more than 40%,” the statement added.
Sonowal said that he has written to Finance Minister, Nirmala Sitharaman and Petroleum Minister, Hardeep Singh Puri highlighting this issue. Sonowal requested them to extend their support for this sector by reducing taxes and price of the fuel. The Shipping Ministry also requested all the states to lower their rates of value added tax over the diesel used by this sector.
Marine fuel prices have a cascading effect on the full value chain of Mass Surface Water transport system and ecosystem. Ferry operators are unable to pass these higher costs on to the common public who has the option of using other subsidized public transport system of railways or road. “These operational hurdles will ultimately act as stumbling block in establishing this budding ecosystem of surface water transportation in the country,” the statement added.