The Delhi government has hiked the taxes on fuel, thus taking up the market price of petrol and diesel in the national capital in phase three of lockdown to recover some lost revenues after days of lockdown.
In the wake of the current coronavirus crisis, the Delhi government has increased the value-added tax(VAT) levied on fuel, which has resulted in a significant mark up on fuel price in the national capital. The price of petrol has gone up by Rs 1.67 per liter while the price of diesel has gone up by a massive Rs 7.10 per liter. The price for petrol and diesel in Delhi after the revision stands at Rs 71.26 and Rs 69.39 per liter respectively. The revised prices are effective from today, i.e from the 5th of May.
The price of petrol in Delhi as of Tuesday includes an excise duty of Rs 22.98 per litre and VAT (including the taxes on dealer commission) of Rs 16.44 per litre. As for diesel, the price includes an excise duty of Rs 18.83 and VAT of Rs 16.26 for every liter that is sold. The revised tax on petrol thus stands at 30% from the previous 27% but for diesel, the tax is almost double – now standing at 30% from the previous 16.75%. This data is according to the Indian Oil Corporation as of May 5.
This move from the Delhi government comes after certain conditional relaxations have been introduced in the third phase of lockdown. That will naturally see more number of road users and thus fuel consumption. Taxes from fuel constitutes a significant portion of state’s revenue and with the nationwide lockdown in place for the entire of April, it was a significant blow to the state’s income sources. CM Arvind Kejriwal had even expressed his concerns over the state’s revenue in April 2020 as it was only a fraction of what was earned last year. Although at a cost to commuters., the Delhi government hopes to recover some of its revenues this way.
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With people staying at home during the lockdown, fuel demand in India has also seen a huge dip with the worst drop in March. Petroleum product consumption in India fell by 17.79% to 16.08 million tonnes in March as demand for petrol, diesel an even aviation turbine fuel fell. Specifically speaking, demand for diesel dropped by 24.23% to 5.65 million tonnes while demand for petrol dropped by 16.37% to 2.15 million tonnes.
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The price of petrol and diesel in other metro cities however remain unchanged. As of May 5, the price of petrol and diesel in Mumbai stands at Rs 76.31 and Rs 66.21 per liter, respectively. In Bangalore, the price of petrol and diesel stands at Rs 73.55 and Rs 65.96, respectively. While the rest of the country still continues to pay a premium for petrol over the national capital, price of diesel in Delhi is now considerably higher than other cities.
