Owing to sliding prices of crude oil in international markets, the Brihanmumbai Municipal Corporation’s octroi revenues will take a big hit for the second consecutive year. The civic body is again likely to fall well short of its annual octroi collection target, which will adversely affect the civic developments works in the city.
As international crude oil prices continue to tumble, its octroi revenues this year have been down by more than Rs 600 crore, which comes to below 35 percent, as compared to 2014-15. Since the trend likely to continue further, the total annual octroi loss from crude oil is likely to be in the excess of Rs 800 crore.
Crude oil is one of the major contributors to BMC’s octroi collection, with 38 percent revenues coming from its import. According to the civic data, the BMC during the period from April to January last year had collected Rs 1,913.67 crore from the import of crude oil. It has significantly come down to Rs 1,289.76 crore in the corresponding time this year.
In the international market, the prices of crude oil have come down sharply from 120 dollars a barrel to 26 dollars in a year. “Due to this, our crude oil octroi collections have been hit very badly. There are chances that the rates would go down further,” said a senior official from the civic assessment and collection department.
The BMC had set an annual target of Rs 7,500 crore for the year 2015-16. However, due to falling crude oil prices, it has revised the estimates to Rs 6,550 crore. “But I don’t think we will now be able to achieve that too,” he added.
Last year, the BMC octroi revenues had dropped for the first time since the beginning of new millennium due to drop in crude oil prices. In 2014-15, the BMC had expected collections of Rs 2,900 crore from crude oil, but they were dropped way below to Rs 2,200 crore (minus 13.5 percent). This year there is likely to be almost three-fold rise in the loss of crude oil.
Octroi is one of the major backbones of the BMC’s revenues, with about 40 per cent income coming from it. The fall in collections is likely to hit the development works in the city, said civic officials.
“It will definitely have an adverse impact on the development works, as the BMC will have to curtail its funds on these works due to dip in revenues,” said the official.
Though, BMC’s revenues from other sources like fungible FSI, property tax etc are on rise, they are not enough to offset losses from crude oil, he added.
