Delhi Govt to Promote Electric Cars by Hiking Petrol, CNG & Diesel Prices

The Delhi government is looking for ways to raise the cost of gasoline, diesel, and compressed natural gas (CNG) cars. The new tax will encourage the purchase of electric vehicles, which are now more expensive than petrol cars. The Delhi government would propose raising the road tax on certain categories of vehicles, according to ETAuto sources.

The plan will be sent to the state's finance department by the government. The transportation department will work on a detailed strategy once the finance department accepts the hike.

At the moment, the price raise plan is in its early phases. The road tax in the national capital currently ranges from 4 percent to 12.5 percent, depending on the vehicle segment. The tax is decided by the vehicle's size, fuel type, and price band. The Delhi government estimates that road tax collection will amount to roughly Rs 2,000 crore or about 4% of overall tax revenue.

Electric vehicles are becoming more popular in Delhi. The overall number of new vehicles registered in Delhi is increasing, and officials from the transport department believe that this would result in increased road tax collections in the near future. 

Electric vehicles, both four-wheelers, and two-wheelers are not taxed by the Delhi government. By 2024, the state government wants to boost the percentage of electric vehicles on the road to 25%. In March of this year, electric car sales accounted for 12.6 percent of overall sales, up 2 percent from February and 4.6 percent higher than sales in January 2022.

The government is planning to fill the void left by the lack of a registration tax on electric vehicles. They are currently losing money due to the increased number of electric cars in the state.

The Main Target is Luxury Vehicles

Initially, the Delhi government plans to target luxury vehicles. The first vehicles to be hit by the new tax hike would cost more than Rs 20-25 lakh. Manisha Sisodia previously stated that the government is looking into other states' road tax schemes. The new tax hike is very likely to take effect within the next few months.

Surprisingly, the Delhi government also prohibits 10-year-old diesel and 15-year-old petrol cars from being driven on the roads. Such vehicles should be disposed of. The usage of 10-year-old diesel-powered and 15-year-old petrol-powered cars is prohibited in New Delhi, according to a National Green Tribunal ruling.