New Delhi, July 6 (PTI): Petrol price was Saturday hiked by a minimum INR 2.40 per litre and diesel by INR 2.36 after Finance Minister Nirmala Sitharaman raised taxes on the fuels to part-fund her Budget for 2019-20.
Petrol price in Delhi was increased by INR 2.45 per litre to INR 72.96 while the increase in Mumbai was INR 2.42 to INR 78.57, according to a price notification issued by state-owned Indian Oil Corp (IOC).
In Kolkata, petrol price went up by INR 2.40 to INR 75.15 and in Chennai by INR 2.57 to INR 75.76 a litre.
Diesel price was hiked by Rs 2.36 per litre in Delhi to INR 66.69 and by INR 2.50 per litre in Mumbai to INR 69.60.
Rates vary from state to state depending upon the incidence of local sales tax or VAT. Also prices vary by a few paise at pumps operated by other state-owned fuel retailers, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL).
Sitharaman had on Friday raised excise duty and road and infrastructure cess on petrol and diesel by INR 2 per litre each to raise INR 24,000-28,000 crore on an annual basis.
Post considering local sales tax or value-added tax (VAT), which is charged after adding central excise duty on base price, the increase in pump rates was higher.
"Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol and diesel. I propose to increase Special Additional Excise duty and Road and Infrastructure Cess each by Rs two a litre on petrol and diesel," she said in her budget speech.
Before the tax increase, petrol attracted total excise duty of INR 17.98 per litre (INR 2.98 basic excise duty, INR 7 special additional excise duty and Rs 8 road and infrastructure cess). Now, this tax has gone up to INR 19.98 a litre.
On diesel, a total of Rs 13.83 per litre excise duty was charged. Now, INR 15.83 per litre is charged as excise duty.
On top of these, VAT is charged which varies from state to state. In Delhi, VAT is levied at the rate of 27 per cent on petrol and 16.75 per cent on diesel. In Mumbai, VAT on petrol is 26 per cent plus INR 7.12 a litre additional tax while diesel attracts 24 per cent sales tax.
Since the Modi government came into power in 2014, excise duty on petrol and diesel has been cut only twice but raised on ten occasions (including the one on Friday). The last time, the duty was revised in October 2018 when excise duty was lowered by INR 1.50 a litre each on petrol and diesel. The government had in October 2017 also cut the same by INR 2 a litre.
The BJP-government at the centre had raised excise duty on petrol by INR 11.77 a litre and that on diesel by INR 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell.
