The government on Saturday announced a record reduction of Rs 8 per liter in excise duty on petrol and Rs 6 per liter on diesel.
The reduction in excise duty will result in a reduction of Rs 8.69 per liter of petrol in Delhi and Rs 7.05 per liter of diesel after taking into account its impact on other levies.
Petrol in the nation’s capital now costs Rs 96.72 per liter from Rs 105.41 previously. Diesel is now priced at 89.62 rupees per liter from 96.67 rupees previously, a price notification from state-owned fuel retailers showed.
In Mumbai, petrol tariffs were reduced to Rs 111.35 per liter from Rs 120.51, while diesel tariffs fell to Rs 97.28 per liter from Rs 104.77.
Rates differ from state to state depending on the incidence of local taxes such as VAT.
Petrol now costs Rs 106.03 per liter in Kolkata (previously Rs 115.12) and Rs 102.63 in Chennai (previously Rs 110.85). Diesel is priced at Rs 92.76 per liter in Kolkata (previously Rs 99.83) and Rs 94.24 in Chennai (previously Rs 100.94).
Announcing the reduction in duties through tweets, Finance Minister Nirmala Sitharaman had also said that the government would provide a subsidy of Rs 200 per bottle to the poor who got a cooking gas connection under the Ujjwala scheme, for 12 bottles in a year to help ease some of the burden. resulting in cooking gas levels rising to record highs.
A 14.2 kg LPG cylinder costs 1,003 rupees in the national capital. Beneficiaries of Pradhan Mantri Ujjwala Yojana will receive a grant of Rs 200 directly to their bank account and the effective price for them would be Rs 803 per 14.2 kg cylinder.
No subsidy has been paid on cooking gas since June 2020, and all users, including Ujjwala beneficiaries, have purchased cylinders at the market rate, which is currently Rs 1,003 in Delhi.
The Rs 200 grant will cost the government Rs 6,100 crore, she had said.
State-owned fuel retailers have passed on the reduction in excise duty to consumers despite losing Rs 13.08 per liter of petrol and Rs 24.09 per liter of diesel due to detention rates , even though the cost of raw materials (crude oil) has jumped.
This reduction in excise duty together with the reduction of Rs 5 on petrol and the reduction of Rs 10 on diesel affected from 4 November 2021, cancels the increase of Rs 13 and Rs 16 per liter of taxes on petrol and diesel carried out between March 2020 and May 2020 to avoid passing on to consumers the sudden drop in international oil prices.
The 2020 excise duty hikes had raised the central taxes on petrol to their highest level of Rs 32.9 per liter and that on diesel to Rs 31.8 per litre.
After the last reduction in excise duties, the incidence of the central tax on petrol will drop to Rs 19.9 per liter and that on diesel to Rs 15.8 per litre.
She urged all state governments to reduce local sales tax or VAT as well.
After November 2021 petrol excise cut by Rs 5 per liter and diesel excise by Rs 10 per litre, 25 states and UT had reduced VAT to give further reprieve to price beaten consumers record retail.
However, states run by non-NDA parties like Maharashtra, Andhra Pradesh, West Bengal, Kerala and Tamil Nadu had not reduced VAT.
After the cut, state-owned oil companies held down gasoline and diesel prices for a record 137 days, during which international oil prices fell from $84 a barrel nearly 14 years ago to $140 a barrel. USD per barrel.
They finally broke the break with a Rs 10 per liter increase in petrol and diesel in 16 days from March 22, but hit a freeze button again after the last review on April 6, although they did not cover all the costs.
Brent – the world’s best-known benchmark crude – was at $112.55 a barrel on Sunday.
Maintaining prices despite rising costs had led to lower revenues for fuel retailers in the January-March quarter.
The central excise duty represents 20% of the price of gasoline, against 26% previously. It now represents 17.6% of the price of diesel. After taking into account local sales tax or VAT, the total tax impact on the price of petrol is 37% and that of diesel 32%, compared to 40-42% previously.
Excise tax on petrol was 9.48 rupees per liter when the Modi government took office in 2014 and that on diesel was 3.56 rupees per litre.
Between November 2014 and January 2016, the government had raised excise duties on petrol and diesel nine times to take away gains from falling global oil prices.
In total, petrol rate duty was increased by Rs 11.77 per liter and diesel duty by Rs 13.47 per liter during these 15 months, enabling the government excise to more than doubled to reach Rs 2.42,000 crore in 2016-17 from Rs 99,000 crore in 2016-17. 2014-15.
It reduced excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But it increased the excise duty by Rs 2 per liter in July 2019.
It increased the excise duty again on 14 March 2020 by Rs 3 per liter each. On May 6, 2020, the government again increased excise duty by Rs 10 per liter on petrol and Rs 13 per liter on diesel.