No port, vessel related charges on coastal shipping for 6 months: Govt

Jul 24,2022

To provide respite to waterway transportation from high fuel prices, the Shipping Ministry has directed all major ports to exempt coastal shipping operations from port and vessel charges for the next six months with immediate effect, an official statement said on Sunday.

Union Minister of Ports, Shipping and Waterways (MoPSW) Sarbananda Sonowal has also asked the state governments to lower VAT on diesel used by the shipping sector, the statement said.

"In order to provide some quick respite to this sector from the impact of global increase in price of fuel, MoPSW has directed all major ports to exempt all berth hiring and vessel-related charges being currently levied to the Ro-Pax (roll-on/roll-off passenger) for the next six months with immediate effect," the statement said.

The cost of marine fuel 'Low Sulphur High Flash High-Speed Diesel' (LSHFHSD) has increased from Rs 76,000 per kilolitre to Rs 1,21,000 per kilolitre. Similarly, the cost of 'Very Low Sulphur Fuel Oil' (VLSFO) has increased from Rs 40,608/KL to Rs 80,917/KL.

The statement noted here that at the beginning of FY 2021-22 the cost of marine fuel- LSHFHSD used to be 10-15 per cent less than retail diesel-HSD (high-speed diesel).

Hence, effectively the rise is more than 40 per cent, it added.

According to the statement, MoPSW also requested MoPNG and MoF to reduce the rates and taxes on fuel to ferries " In this regard, he had also written letters to Union Finance and Corporate Affairs minister Nirmala Sitharaman and Union Minister of Petroleum and Natural Gas Hardeep Singh Puri, highlighting this issue and requested them to extend their support for this sector by reducing taxes and price of the fuel respectively," it said.

The statement noted that marine fuel prices inclusive of taxes have cascading effect on the full value chain of the 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, it said.

The MoPSW is promoting the Ro-Ro/Ro-Pax/Ferry waterway transportation which has lower emissions compared to other modes of transport for the same amount of cargo.

Also, there is a significant time and cost saving compared to the traditional transportation modes, the statement said, adding that concurrently traffic congestion on road/railways, noise pollution and accidents on the roads may also get reduced.

Such a water-based transportation service is an effective measure to lower the logistics costs, reducing travel time and promoting coastal shipping on several feasible routes, it said.

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.

According to the statement, this Ro-Pax ferry service has carried over 78,000 vehicles and more than 2.6 lakh passengers since its inception.