Sat Jan 31 10:09:37 UTC 2026: ### Andhra Pradesh Petroleum Traders Allege Diesel Mafia Undermining State Revenue

The Story:

The Andhra Pradesh Federation of Petroleum Traders (APFPT) has raised serious concerns about a “diesel mafia” operating in the state, allegedly evading Value Added Tax (VAT), additional VAT, and road cess, thereby impacting Andhra Pradesh’s revenue and unfairly competing with licensed fuel dealers. The federation alleges that bulk consumers are dispensing diesel to retail customers at lower prices, and some outlets are sourcing diesel from other states, violating the conditions of their licenses that are meant for captive consumption only. Furthermore, they claim that fuel bowsers, intended for on-site supply to heavy machinery, are being misused to sell fuel to regular transport vehicles.

In response, the Chief Commissioner of State Taxes stated that preventive measures have been initiated, including intercepting vehicles transporting diesel to Yanam for illegal unloading in Andhra Pradesh and mandating government contractors to procure fuel within the state. The APFPT has informed the Civil Supplies department about violations and hopes for a joint enforcement committee to address the issue.

Key Points:

  • The APFPT alleges a “diesel mafia” is evading taxes and unfairly competing with licensed dealers.
  • Bulk consumers are reportedly dispensing diesel to retail customers at lower prices.
  • Some consumer outlets are sourcing diesel from other states like Gujarat, Yanam, and Karnataka, violating license terms.
  • Fuel bowsers are being misused to sell diesel to regular transport vehicles.
  • The Chief Commissioner of State Taxes says measures have been taken, including intercepting illegal fuel transports and mandating in-state fuel procurement for government contracts.
  • The APFPT is seeking intervention from Chief Minister N. Chandrababu Naidu.

Key Takeaways:

  • Tax evasion in the diesel trade is a significant concern in Andhra Pradesh, potentially impacting state revenue.
  • Loopholes in regulations regarding bulk consumers, fuel bowsers, and bio-diesel outlets are being exploited.
  • Inter-state fuel sourcing creates opportunities for tax avoidance and unfair competition.
  • The government is attempting to address the issue through enforcement measures and procurement mandates, but challenges remain.
  • Collaboration between the government, petroleum traders, and relevant departments is necessary to curb illegal diesel trade effectively.

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