Petrol price down by Rs2.5 a litre, diesel by Rs2.25
New Delhi: Petrol price was cut by Rs2.5 per litre and diesel by Rs2.25 Wednesday following the reduction in excise duty on auto fuels. Petrol in Delhi now costs Rs68.38 a litre, down from Rs70.88.
A litre of diesel now comes for Rs56.89 as against Rs59.14 previously, according to Indian Oil Corporation (IOC), the nation’s largest fuel retailer. The government had Tuesday cut excise duty on petrol and diesel by Rs2 per litre each to moderate the relentless rise in fuel prices over the last three months.
IOC director (finance) A. K. Sharma said the cut in retail selling price is higher after factoring in its impact on value added tax (VAT). As things stand, excise duty is levied on fuel produced ex-refinery. Local sales tax or VAT is levied on the total of ex-refinery cost plus excise duty and commission paid to dealers.
So, till Tuesday the VAT on petrol in Delhi was Rs15.07 while on Wednesday it stands at Rs14.54. On diesel, VAT is Rs8.41 per litre Wednesday as against Rs8.73 previously. The excise duty cut paused the relentless rise in rates witnessed since 4 July.
While petrol prices had increased by Rs7.8 to reach Rs70.88 a litre in Delhi Tuesday, the highest since August 2014, diesel rates had risen by Rs5.7 to touch an all-time high of Rs59.14. The excise duty cut would cost the government Rs26,000 crore in annual revenue and about Rs13,000 crore during the remaining part of the current fiscal year that ends on 31 March, 2018, the government had said Tuesday.
The government, which had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices, has been criticised for not cutting excise duty despite a sustained rise in fuel prices since early July.
In all, duty on petrol was hiked by Rs11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop-up more than double to Rs2,42,000 crore in 2016-17 from Rs99,000 crore in 2014-15.
While the costliest petrol was sold in September 2013 when it was priced at Rs76.06 a litre in Delhi, the previous highest rate for diesel was also during the Bharatiya Janata Party (BJP) rule in September 2014 when it was priced at Rs58.97 per litre.
On petrol, excise has been cut to Rs19.48 per litre from Rs21.48 per litre and on diesel to Rs15.33 a litre from Rs17.33 previously. The rise in petrol and diesel prices also reflected in wholesale price inflation, which increased to 3.24% in August 2017, as compared to 1.88% in July.