Sri Vijaya Puram, Apr 07: The Andaman Ship Owners Association has submitted a representation to the Andaman & Nicobar Administration seeking urgent rationalisation of Value Added Tax (VAT) on marine bunker fuel (HFLS/HSD), citing a steep rise in fuel prices and its adverse impact on maritime operations in the Islands.
According to the Association, bunker fuel prices have witnessed a sharp increase within a short span of time, rising from ₹86.00 per litre up to 15th March 2026 to ₹123.53 per litre between 16th March and 31st March 2026, and further escalating to ₹176.71 per litre from 1st April 2026. This marks an increase of over 100 percent, significantly affecting vessel operations.
In a letter addressed to the Chief Secretary of Andaman and Nicobar Administration, Mr. Mohd. H Jadwet, the President of Ship Owner Association mentioned that marine fuel constitutes nearly 30 percent of operational costs, and the sudden surge has compelled operators to revise freight charges and passenger tariffs. This, in turn, is directly impacting the supply of essential commodities from the mainland, inter-island connectivity, and the overall cost of living in the Islands.
Emphasizing the critical role of the maritime sector as the primary logistical lifeline of the Andaman & Nicobar Islands, the Association pointed out the disparity in the existing VAT structure. While retail fuels such as petrol and diesel attract 1 percent VAT and Aviation Turbine Fuel (ATF) is also taxed at 1 percent to support connectivity, marine bunker fuel continues to be taxed at 8 percent.
He stated that despite progressive steps taken to support aviation and retail sectors through VAT rationalisation, the marine sector continues to face a significantly higher tax burden, further escalating operational costs amid rising base fuel prices.
In view of the situation, the Association has urged the Administration to rationalise VAT on marine bunker fuel and bring it at par with other essential sectors at 1 percent. It was further stated that such a measure would help stabilise freight and passenger costs, ease pressure on essential commodity prices, and support the sustainability of maritime operations in this geographically isolated region.
Mr. Mohamed Hashim Jadwet expressed hope that the Administration will give due consideration to the request in view of the sector’s vital importance to the Islands.
