Delhi government has decreased the Value Added Tax (VAT) on petrol by Rs 8 on Wednesday that comes as a relief to the people amid the soaring price of essential fuel. The tax has been reduced to 19.40 per cent from 30 per cent.
Following the reduction petrol rates will come down in the national capital and the new rates will come into effect from midnight today.
Earlier, on 4 November the Kejriwal government had cut the excise duty on petrol and diesel to bring down the rates from the soaring high prices. The centre has also announced a reduction in excise duty on petrol and diesel by Rs 5 per litre and Rs 10 per litre respectively.
Following the centre’s announcement, several states that are mainly ruled by the BJP have also decreased VAT on fuel prices bringing some relaxation to people. Two dozen states and UTs have equaled the excise cuts with a VAT reduction with that of the central government’s. The percentage of taxes on petrol has dropped to around 50 per cent and that on diesel to 40 per cent following the centre’s cut.
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Presently, per litre petrol in Delhi is sold at Rs 103.97, while the diesel cost at ₹ 86.67, according to Indian Oil Corporation. After the latest decrease in VAT, the cost of petrol will become the cheapest in Delhi-NCR. Meanwhile, in Mumbai, petrol price stood at ₹ 109.98 per litre; while diesel was at ₹ 94.14 per litre, the highest amongst the metros.
Petrol rates may differ from state to state depending on the VAT.
State-run oil refiners such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum review the fuel rates every day, after it takes into account the crude oil prices in the international markets, and the rupee-dollar exchange rates.
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Oil prices have risen over 2% in the global market, which is still recovering from the losses from the previous session. Meanwhile, major oil producers are preparing to discuss their next step in response to the alarm that is triggered by the Omicron variant.
After a dip of 3.9 per cent on Tuesday, Brent crude futures increased to $1.90, or 2.7 per cent, to $71.13 a barrel and U.S. West Texas Intermediate (WTI) crude futures rose $1.71, or 2.6 per cent, to $67.89 a barrel, after a 5.4 per cent following a drop on Tuesday.