On Tuesday, Delhi's petrol and diesel prices saw a significant hike after the Delhi government raised local sales tax or VAT on the two fuels. Value Added Tax (VAT) on petroleum has been increased to 30% of the existing 27% and 30% of the existing 16.75% on diesel.
After being stable for 50 days, petrol prices rose by Rs 1.67 a litre, while diesel prices rose by Rs 7.10 in Delhi after the state government increased VAT on the two auto fuels. For every litre, consumers now have to shell out Rs 71.26 for petrol and Rs 69.39 for diesel.
In the face of massive losses in revenue during the coronavirus lockdown which has now been extended for the second time, government officials in Delhi said the move to hike fuel prices is expected to boost government revenue, which has been hit hard during the stressful times.
In Haryana, the state government had recently raised taxes on petrol by about Rs 1 per litre, and diesel by about Rs 1.1 per litre. In Chennai, petrol prices rose by about Rs 3.25 per litre, and diesel prices rose by about Rs 2.50 per litre, following a hike in VAT by the Tamil Nadu government.
Meanwhile, on April 22, the Assam government increased the Value Added Tax (VAT) on diesel, gasoline, and other motor spirits. In Assam, diesel rose by Rs 23.66 paise per litre while VAT for petrol and other motor spirits rose by Rs 32.66 paise per litre on April 22.
However, petrol prices in Mumbai remain unchanged. According to the Indian Oil Corporation's official website on Tuesday, in Mumbai, petrol costs Rs 76.31 per litre and diesel costs Rs 66.21 a litre. In Kolkata, a litre of petrol will cost Rs 73.30 per litre while diesel is now priced at Rs 65.62 per litre.
While petrol pumps have been listed in the category of essential services throughout the entire lockdown period, sales have dropped dramatically due to the shutdown of industries, offices and restrictions on vehicle movement. Sales of gasoline fell by 61 per cent and diesel fuel by 56.5 per cent in April. Still, as the economy sees a staggered opening and relaxation of lockdown standards at several locations, demand is expected to rise this month.
