In order to provide some quick respite to the waterways transportation sector from the impact of the global increase in the price of fuels, the Ministry of Ports, Shipping and Waterways has directed all major ports to exempt all berth hiring and vessel-related charges being currently levied to the Ro-Pax or passenger ferries for the next six months.
The cost of marine fuel 'Low Sulphur High Flash High-Speed Diesel' has increased from Rs.76,000 per kiloliter to Rs 1,21,000. Similarly, the cost of 'Very Low Sulphur Fuel Oil' has increased from Rs 40,608 per kiloliter to Rs 80,917.
It is to be noted here that at the beginning of FY2021-22 the cost of marine fuel used to be 10-15 per cent less than retail diesel. Hence, effectively the rise is more than 40 per cent.
The ministry has been promoting the Ro-Ro/Ro-Pax/ferry waterway transportation which has lower emissions compared to other modes of transport. Also, there is a significant time and cost savings compared to the traditional transportation modes.
"Concurrently traffic congestion on road/railways, noise pollution and the accidents on the roads may also get reduced. Such water-based transportation service is an effective measure to lower the logistics costs, reducing travel time and promotion of coastal shipping on several feasible routes," a Ministry of Ports, Shipping and Waterways statement said on Sunday.
To discuss the impact of high marine fuel prices and GST on ferry operations, Union Minister Sarbananda Sonowal recently held a meeting with senior officials of the ministry.
Sonowal had also written letters to Finance Minister Nirmala Sitharaman, and Petroleum Minister Hardeep Singh Puri, highlighting the issues and requesting them to extend their support for this sector by reducing taxes and the price of the fuel respectively.
"The rising fuel cost at the international level is now making our local Ro-Pax and Passenger Ferry operations unviable so this exemption of vessel and port-related charges by MoPSWwill provide the necessary breather to this sector for the next 6 months. We have also requested MoPNG to consider a reduction in fuel prices and Ministry of Finance to lower the associated taxes on it so as to provide the necessary support to this sector in present circumstances," Sonowal said.
The ministry has also requested all the States to lower their rates of VAT over the diesel used by this sector.
"It is noteworthy that, marine fuel prices inclusive of taxes have cascading effect on the full value chain of Mass Surface Water transport system and ecosystem, the burden of which the ferry operators cannot pass on to the common public who has the option of using other Government subsidized public transport system of rail or road. These operational hurdles will ultimately act as a stumbling block in establishing this budding ecosystem of surface water transportation in the country," the statement added.
The Ro-Pax services implemented by Deendayal Port Authority between Ghogha and Hazira under Sagarmala Programme have reduced travel time from 12 hrs. to 4 hrs. This Ro-Pax ferry service has carried over 78,000 vehicles and more than 2.6 lakh passengers since its inception. Similarly, Maharashtra Maritime Board initiated the Ro-Pax ferry service on Mumbai - Mandwa route.
The project resulted in saving around 3 hours of road travel against 45 minutes by sea route.
More than 5.5 Lakh passengers have availed of this Ro-Pax service and more than 1 lakh vehicles have been transported, the statement added.