Petrol prices in Delhi cut by Rs. 8 per liter
The Delhi government on Wednesday decided to slash Value-Added Tax (VAT) on petrol from 30% to 19.4%. Effectively, petrol prices will be cut by Rs. 8 per liter in the national capital city as a result of the tax reduction. The new prices will come into effect from Wednesday midnight. Here are more details on this.
Why does this story matter?
Reduction in petrol prices will come as a big relief for Delhi residents. Rates of auto fuels like petrol and diesel have touched record highs in recent months in all metro cities across India. Earlier, on November 4, the central government had reduced excise duty on petrol and diesel bringing a slight drop in fuel prices.
What will be the new rate?
The announcement comes after a Cabinet meeting chaired by Delhi Chief Minister Arvind Kejriwal earlier in the day. Petrol price in Delhi is expected to dip to around Rs. 95 per liter from Rs. 103.97 per liter currently. Meanwhile, diesel rates in the city stand at Rs. 86.67 per liter, according to the Indian Oil Corporation.
VAT rose 6 times since 2014
In July last year, the VAT on petrol in Delhi was increased to 30%. In fact, VAT has increased six times in the capital due to several hikes since 2014.
What are the rates in other cities?
In Mumbai, petrol is being retailed at Rs. 109.98 per liter while diesel is available at Rs. 94.14 per liter. Prices for petrol and diesel in Chennai stand at Rs. 101.40 per liter and Rs. 91.43 per liter, respectively. In Kolkata, petrol costs Rs. 104.67 per liter and diesel is being sold at Rs. 89.79 per liter.
How are fuel prices calculated?
State-run oil companies like Indian Oil and Bharat Petroleum revise fuel rates on a daily basis, taking into consideration crude oil prices and the rupee-dollar exchange rate. Fuel prices vary across Indian states due to differing VAT rates.