In a bid to provide relief to all, the Delhi government on Wednesday had reduced the Value Added Tax (VAT) on petrol by Rs 8. The decision was taken in a meeting of Delhi cabinet chaired by Delhi chief minister Arvind Kejriwal on Wednesday. With this, the petrol price is all set reduce in the national capital. The new rates would be effective from midnight today.
To control the skyrocketing fuel prices in the country, the Centre had announced to reduce excise duty on petrol and diesel by Rs 5 per litre and Rs 10 per litre respectively on November 4. Since then, several states, mainly ruled by Bharatiya Janata Party (BJP) and allied, cut VAT on petrol and diesel to provide some relief to people. Two dozen states and UTs have matched the central government’s excise cuts with a VAT reduction.
The total incidence of taxes on petrol has come down to 50 per cent and that on diesel to 40 per cent following a reduction in excise duty by the central government. The states which had already announced VAT reduction, the percentage of taxes in retail price will be marginally lower.
Petrol to Be Cheapest in Delhi in Delhi-NCR
At present, a litre of petrol is available Rs 103.97 in the national capital. In Noida, you have to shell Rs 95.51 for a litre of petrol. Petrol is being priced at Rs 95.90 a litre in Gurugram. With the latest reduction in VAT, the price of petrol will be the cheapest in Delhi in Delhi-National Capital Region (Delhi-NCR). In Mumbai, the retail price of petrol stood at Rs 109.98 per litre, highest among the metro cities.
The retail price of petrol and diesel is calculated after adding central excise, commission paid to dealers and value-added tax (VAT) to basic oil prices. In India, petrol price varies from one state to another due to value-added tax or VAT.
How Petrol Price is Being Calculated
Rajasthan has the highest VAT on petrol, followed by Maharashtra, Andhra Pradesh and Madhya Pradesh. The lowest VAT of Rs 4.93 a litre is levied in Andaman & Nicobar. The basic oil price is the prevailing international benchmark rate plus freight. Basic price, which includes the cost of oil plus freight, varies between Rs 52.01 a litre in Chennai to Rs 59.89 in Ladakh. On top of this, the central government charges an excise duty of Rs 27.90 which is paid at the factory gate (refinery in this case). Thereafter, the state governments levy different rates of local sales tax or VAT.
Global Petrol Price
International oil prices have started with gains this Wednesday morning in Asian trade ahead of OPEC meeting outcome and inventory data. According to a Reuters poll Crude inventories fell by 1.237 million barrels in the week ending November 19, compared with expectations for a decrease of 481,000 barrels.
Globally, oil prices rose more than 2 per cent. Brent crude futures rose $1.90, or 2.7 per cent, to $71.13 a barrel, after a 3.9 per cent dip on Tuesday. US 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 drop on Tuesday.
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