Possible to reduce petrol price by upto Rs. 25: Chidambaram
Senior Congress leader P Chidambaram today, in a series of tweets, claimed it was possible to cut up to Rs. 25 per liter in petrol prices but the government will not. He added that government saves Rs. 15 on every liter of petrol due to fall in crude oil prices and puts an additional tax of Rs. 10 on every liter of petrol.
Prices in Delhi cheapest among all metros
Petrol costs Rs. 76.87 per liter in Delhi and diesel costs Rs 68.08 a liter. In the last nine days, petrol price has risen by Rs. 2.24 a liter and diesel by Rs. 2.15. Rates vary from state to state depending on the incidence of local sales tax or VAT. The prices in Delhi are the cheapest among all metros and most state capitals.
State sales tax varies from state to state
State sales tax or VAT varies from state to state. Unlike excise duty, VAT is ad valorem and results in higher revenues for the state when rates move up.
Excise duty rates by central government on petrol and diesel
The central government levies Rs. 19.48/liter of excise duty on petrol and Rs. 15.33/liter on diesel. In Delhi, VAT on petrol was Rs. 15.84/liter and Rs. 9.68 on diesel in April. Now, it is Rs. 16.34 on petrol and Rs. 10.02/liter on diesel. Every rupee cut in excise duty on petrol and diesel will result in a revenue loss of Rs. 13,000 crore.
BJP-ruled states ignored the call of reducing excise duty rates
The government had raised excise duty nine times between November 2014 and January 2016 as global oil prices fell but then cut the tax just once in October last year by Rs. 2 a liter. Later, the Center had asked states to also lower VAT. Four states, Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh, followed while others including BJP-ruled ones ignored the call.
The excise roller coaster helped the government in the end
Overall duty on petrol rate was hiked by Rs. 11.77 per liter and that on diesel by Rs. 13.47/liter in those 15 months that helped governments excise mop up more than double to Rs. 2,42,000 crore in 2016-17 from Rs. 99,000 crore in 2014-15.
