New Delhi: After 15 days of consecutive hikes, the skyrocketing run of fuel prices stopped on Wednesday as they remain unchanged with petrol being sold at Rs 80.87 in Delhi and Rs 88.26 in Mumbai – the same as it was announced on Tuesday. Also Read - Diesel Price in Delhi Slashed by Over Rs 8 Per Litre as Govt Cuts VAT From 30% to 16.75%
Similarly, a litre of diesel in the national capital is priced at Rs 72.97 and Rs 77.47 in Mumbai. Also Read - Petrol, Diesel Price Today: Crude Oil Rates in Delhi Hike Again After Single-day Freeze
As Indian rupee on Tuesday plunged to an all-time low, making imports costlier, the petrol and diesel prices witnessed yet another of 14 paise per litre. The petrol prices even breached the psychological barrier of Rs 90 and touched a scorching Rs 90.11 in Maharashtra’s Parbhani, making a new record. Also Read - Fuel Price Hike: Congress to Hold Nationwide Protest on Monday
On Tuesday, West Bengal government announced reduction on Value Added Tax (VAT) on petrol and diesel by Re 1 per litre in the state. The move came after Andhra Pradesh announced cut in VAT on fuel prices by Rs 2 per litre while Rajasthan reduced the prices by Rs 2.5 per litre in the state.
The Narendra Modi government has expressed its inability to control the spiralling fuel prices, attributing the issue to the strengthening US Dollar and other global factors.
The petroleum needs in the world today is facing severe crisis due to non-availability in the international market, Union Law Minister Ravi Shankar Prasad said on Monday.
Meanwhile, news agency quoted an official on Monday saying that the central government has no plans to reduce taxes on petrol and diesel in near future as neither the Centre nor some states can afford to suffer revenue loss from such a move.
The official said that if the central government cuts excise duty on petrol and diesel, it will impact the fiscal deficit. On the other hand, states like Bihar, Kerala and Punjab are not in a position to cut sales tax (or VAT).
The government, he said, anticipates that international oil prices, which together with a drop in the value of rupee has been fuelling the fuel price rise to record levels, will moderate in coming days to take pressure off.
The spike in prices has renewed calls for cut in excise duty but Finance Minister Arun Jaitley has remained non-committal, saying international oil prices are volatile and have not shown any linear movement.
Almost half of the fuel price is made up of taxes. The Centre levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) – the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel.
Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.
Since mid-August, petrol price has risen by Rs 3.79 a litre and diesel by Rs 4.20 per litre.
The Central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
This led to its excise collections from petro goods more than doubling in last four years – from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18.