Petrol, diesel cheaper on Diwali as multiple states cut VAT on fuel
From Uttarakhand in the north to Karnataka in the south, multiple states have heeded the central government’s call to “commensurately reduce” VAT on petrol and diesel prices following the Union finance ministry’s decision to cut the excise duty on fuel.
Facing months of intense pressure over rising fuel prices in the country, the central government on Wednesday cut excise duty on petrol and diesel by record amounts of ₹5 and ₹10, respectively, per litre, to bring down their rates from the highest-ever levels. Announcing the decision, a government statement said the Centre has also urged states to commensurately (in an equivalent measure) reduce the value-added tax (VAT) on petrol and diesel to give relief to consumers.
Subsequently, multiple states heeded the central government’s advice to bring down the petrol and diesel prices. Here’s a list of states which have reduced petrol and diesel prices in their respective territories by bringing down the VAT attached to the fuel rates:
Uttarakhand has announced a reduction in VAT on petrol by ₹2 per litre in the state. With this, petrol prices in Uttarakhand are going down by ₹7 per litre.
Thanking the Union government for its decision to reduce the excise duty on fuel prices, Uttarakhand chief minister Pushkar Singh Dhami said on Wednesday that his government has decided to give the extra relief of ₹2 per litre on petrol (in addition to the ₹5 per litre relief provided by the Centre), thus making petrol cheaper in the state by ₹7 per litre.
The Karnataka government announced that it is going to reduce the VAT on both petrol and diesel prices by ₹7 per litre from November 4. Chief minister Basavaraj Bommai himself made the announcement on Wednesday, taking to his official handle on Twitter.
The Haryana government has also reduced VAT on fuel prices in the state. Now both petrol and diesel will be cheaper by ₹12 per litre in the northern state.
Taking to his official handle on Twitter, Haryana chief minister Manohar Lal Khattar said, “On the occasion of Diwali, the central government has announced a reduction in the prices of petrol and diesel. Taking it forward, the Haryana government has also reduced the VAT on fuel prices; now both petrol and diesel in the entire state will be cheaper by ₹12 per litre.
The Assam government, in consonance with the reduction in excise duty on part of the central government, has also announced a reduction in VAT on petrol and diesel by ₹7 per litre.
Earlier last month, Assam chief minister Himanta Biswa Sarma had said that the state government was ready to cut its share of taxes on fuel if the high rates continue for a longer period.
Goa chief minister Pramod Sawant also announced slashing the VAT by ₹7 on both petrol and diesel in the state.
He also expressed his gratitude to Prime Minister Narendra Modi for giving relief to the common man and helping control inflation.
Tripura announced that petrol and diesel will be cheaper by ₹12 and ₹17, respectively, per litre from November 4 as the state government provided a further relief of ₹7 per litre on the prices of both these fuels, in addition to the relief provided by the central government by reducing the excise duty.
Acting on the Centre’s plea to states to “commensurately reduce” VAT on petrol and diesel, the Uttar Pradesh government on Thursday said that the prices of diesel and petrol in the state will be reduced by ₹12 per litre each.
Gujarat government also announced on Thursday the implementation of the Centre’s decision and reduced prices of petrol and diesel by ₹7 per litre in the state.
Following the lead of other states, the Manipur government on Wednesday announced to reduce VAT on petrol and diesel by ₹7 each with immediate effect.
Manipur chief minister N Biren Singh, while welcoming Centre’s decision to reduce excise duty on petrol and diesel, tweeted, “Heartily welcome PM Narendra Modi Ji’s decision to reduce excise duty on petrol and diesel as a gift to the people of this nation on this Diwali.”
Sikkim chief minister Prem Singh Tamang on Thursday announced a reduction in taxes on petrol and diesel by ₹7 per litre, hours after the central government reduced excise duty on fuel.
Petrol would now be cheaper by ₹12 per litre and diesel by ₹17 per litre in the state.
Fuel prices in metro cities
Petrol price on Thursday was cut by ₹6.07 per litre and diesel price by ₹11.75 in Delhi as oil companies passed on a record reduction in excise duty rates to consumers. Petrol will cost ₹103.97 per litre in Delhi against ₹110.04 per litre, according to a price notification of state-owned fuel retailers. Diesel rates accordingly will reduce to ₹86.67 per litre from ₹98.42 per litre.
In Mumbai, the petrol price has been cut by ₹5.87 to ₹109.98 per litre and diesel by ₹12.48 to ₹94.14 per litre. Kolkata saw the price of diesel being reduced by ₹5.82 to ₹104.67 per litre and that of diesel by ₹11.77 to ₹89.79 per litre.
Petrol price in Chennai has been reduced by ₹5.26 to ₹101.40 per litre and diesel by ₹11.16 to ₹91.43 per litre.
Since states charge local sales tax or VAT not just on the base price but also on the excise duty levied by the centre, the total incidence of price reduction is higher. The VAT rates differ from state to state, leading to differential rates of fuel.