New Delhi : Since July 2021 for the first time the prices of petrol is below Rs. 100 in fifteen states, and three Union Territories. Incidentally, all 15 states are ruled by the BJP and its allies except for Odisha, no other non-BJP-ruled state or UT has slashed fuel prices yet.
Overall, 23 states and UTs have undertaken a commensurate reduction of Value Added Tax (VAT) on petrol and diesel to give relief to consumers. Karnataka, Bihar, and Madhya Pradesh are the only BJP-ruled states where petrol still costs more than Rs 100 despite heavy cuts by the Centre and state. Petrol in the UT of Ladakh is also being sold at more than Rs 100.
A day ahead of Diwali, the Centre announced rate cuts on petrol and diesel prices. With this move, the central levy on petrol and diesel was cut by Rs 5 and Rs 10.
Fuel prices had touched the Rs 100-mark at the beginning of the second week of July almost everywhere in the country. Petrol was a little over Rs 69 per litre in April 2020 and had touched over Rs 90 at the end of March this year.
Following the Centre’s move, 16 states and seven Union Territories announced commensurate cuts in VAT, while 12 states and 1 UT desisted from making a move.
The states/UTs which are selling petrol below Rs 100 are Uttar Pradesh, Uttarakhand, Gujarat, Haryana, Assam, Chandigarh, Goa, Himachal Pradesh, Jammu and Kashmir, Sikkim, Arunachal Pradesh, Mizoram, Nagaland, Tripura and Puducherry.
The states/UTs which have not undertaken any reduction in VAT on petrol and diesel are Maharashtra, Delhi, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Meghalaya, Jharkhand, Chhattisgarh, Punjab, Rajasthan and Andaman and Nicobar. All these states are ruled by non-BJP parties.
In fact, Odisha is the only opposition-ruled state that has announced a VAT reduction of Rs 3 per litre on both petrol and diesel.
With this distinction, the BJP and its allies in NDA are expected to extract political mileage.
DIFFERENT CUTS FOR DIFFERENT STATES
The heaviest reduction in petrol prices has been in Ladakh with a Rs 13.43 cut. However, the fuel is still being sold at Rs 102.99 in the UT.
Among the states which have announced the sharpest cut in fuel prices are Karnataka, Puducherry and Mizoram, where the petrol price per litre has come down by Rs 12.62 and Rs 13.35.
Similarly, the highest reduction in diesel prices is in Ladakh with a Rs 19.61 price cut. Among states, the maximum price cut for diesel is in Karnataka with Rs 19.49 per litre, followed by Puducherry and Mizoram.
There were variations in the cuts in different states as the rate of VAT is neither uniform nor is it levied on the same base.
Some states charge the vat on the base price of fuels and others include the central excise in the base price for levy of VAT.
In states which charge VAT on the base price, which includes the central levies, the total incidence of price reduction was higher along with the states which charge higher VAT. These include Karnataka, Assam, Goa, Uttar Pradesh, Tripura, Manipur, Gujarat, Himachal Pradesh, Uttarakhand, Bihar, Odisha, Haryana, and Arunachal Pradesh.
While the Centreās levy cut was fixed, most states responded differently. Karnataka, Assam, Tripura, Manipur, Gujarat and Goa announced a cut of Rs 7 on both petrol and diesel in addition to the Centreās cut.
In Odisha, VAT has been reduced by Rs 3 per litre on both petrol and diesel. In Bihar, there has been a cut of Rs 3.20 per litre on petrol and Rs 3.90 on diesel. Uttarakhand reduced the VAT by Rs 2.
In Arunachal Pradesh, consumers will benefit from a Rs 10.20 price cut on petrol and Rs 15.22 on diesel after the relief given both by the Centre and the state government.
In Delhi, with the AAP government not backing up the Centreās price cut, the reduction in petrol price was Rs 6.07 and that on diesel was Rs 11.75.
The minimum fall in petrol prices was in Dadra and Nagar Haveli and Daman and Diu, where fuel prices were cut by Rs 5.7.
In Congress-ruled Rajasthan, petrol prices dropped by Rs 6.35. For diesel, Chennai witnessed a reduction of Rs 11.16 per litre and the price for petrol was reduced by Rs 5.26.
The Rs 5 cut in the central levy on petrol and Rs 10 on diesel is the highest-ever reduction after the Rs 13 and Rs 16 per litre increase in taxes on fuels effected between March 2020 and May 2020.
The twin hikes in central levies had taken the Centreās collection on each litre of petrol to their highest level of Rs 32.9 and diesel to Rs 31.8 a litre.
The costliest diesel is now sold in Rajasthan at Rs 95.71 a litre (Jaipur), followed by Andhra Pradesh (Rs 95.18) and Mumbai (Rs 94.14). The cheapest diesel is in Mizoram at Rs 79.55 a litre. The additional reduction, on top of the excise duty cut, is the lowest in Uttarakhand because of lower duty cuts and the highest in UT of Ladakh.
LOW CUTS IN FOUR METROS RULED BY NON-BJP PARTIES
Citizens of four big metros of the country – Delhi, Kolkata, Mumbai and Chennai — however, are not as fortunate as their counterparts in other big or small cities. The governments of their respective states are run by the opposition parties which havenāt announced price cuts on fuel following the Centreās move.
On Thursday, the petrol price in Delhi was Rs 103.97 against Rs 110.04 per litre on Wednesday. Diesel was down to Rs 86.67 per litre from Rs 98.42.
In Mumbai, petrol was being sold at Rs 109.98 per litre with a Rs 5.87 cut and diesel at Rs 94.14 per litre with a Rs 12.48 cut.
In Kolkata, petrol was being sold at Rs 104.67 with a Rs 5.82 cut and diesel at Rs 89.79 per litre with a Rs 11.77 cut.
In Chennai, a litre of petrol was priced at Rs 101.40 after a cut of Rs 5.26 and diesel was Rs 91.43 per litre, cheaper by Rs 11.16.
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