Good News! Petrol, Diesel Prices Slashed in Delhi, Mumbai & Chennai

In Delhi, the price of petrol was reduced by Rs 6.07 per litre on Thursday, and the price of diesel was down by Rs 11.75, as oil companies passed on a record fall in excise tax rates to customers.

Under pressure, the government lowered excise duty on petrol by Rs 5 per litre and diesel by Rs 10 per litre on Wednesday, providing relief to customers who have been hit by record-high retail fuel rates. The overall incidence of price decrease is larger since states impose local sales tax or VAT not only on the base price but also on the excise duty charged by the centre.

Petrol Price in Delhi

According to a pricing statement from state-owned fuel distributors, petrol would cost Rs 103.97 per litre in Delhi, compared to Rs 110.04 per litre elsewhere.

Diesel prices would drop to Rs 86.67 per litre, down from Rs 98.42 per litre.

Petrol Price in Mumbai, Chennai

In Mumbai, the price of petrol has been reduced by Rs 5.87 to Rs 109.98 per litre, and the price of diesel has been reduced by Rs 12.48 to Rs 94.14 per litre. The price of fuel in Kolkata was cut by Rs 5.82 to Rs 104.67 per litre, and the price of diesel was decreased by Rs 11.77 to Rs 89.79 per litre.

In Chennai, the price of petrol has been decreased by Rs 5.26 to Rs 101.40 per litre, and the price of diesel has been reduced by Rs 11.16 to Rs 91.43 per litre.

The rate of VAT varies from state to state, resulting in variable fuel rates.

The excise duty reduction announced on Wednesday night is the highest. It reverses a portion of the Rs 13 and Rs 16 per litre rise in petrol and diesel taxes enacted between March 2020 and May 2020 in order to avoid passing on the steep drop in international oil prices to consumers.

The increase in excise duty had pushed government taxes on petrol to a new high of Rs 32.9 per litre, while diesel taxes had risen to Rs 31.8 per litre.

In addition to lowering excise duties, the Union government advised states to slash VAT on petrol and diesel to provide assistance to consumers. VAT was cut in six BJP-ruled states: Uttar Pradesh, Goa, Karnataka, Uttarakhand, Tripura, and Bihar.

The tax decrease comes as a result of a persistent rise in international oil costs, which has pushed pump rates throughout the country to all-time highs. While petrol prices surged beyond Rs 100 per litre in all major cities, diesel prices had surpassed that threshold in more than a half-dozen states.

Since the government's decision to hike excise duty to record levels on May 5, 2020, the overall increase in petrol prices has been Rs 38.78 per litre. During this time, diesel prices have risen by Rs 29.03 per litre.

Opposition parties, notably Congress, have slammed the government's inexorable increase in fuel costs, demanding that it lower its excise duty.

Based on consumption data from April to October, the government will lose Rs 8,700 crore per month as a result of the excise duty drop. According to industry estimates, this amounts to an annual effect of approximately Rs 1 lakh crore. The impact for the rest of the fiscal year will be Rs 43,500 crore.

Excise duty collections increased to over Rs 1.71 lakh crore in April-September 2021, according to data from the Controller General of Accounts (CGA) in the Union Ministry of Finance, up from Rs 1.28 lakh crore in the previous fiscal. Excise receipts for the entire fiscal year 2020-21 were Rs 3.89 lakh crore, compared to Rs 2.39 lakh crore in 2019-20, according to CGA statistics.

Only petrol, diesel, ATF, and natural gas are subject to excise duty since the implementation of the Goods and Services Tax (GST) regime. The GST applies to all other products and services.

Rameswar Teli, Minister of State for Petroleum and Natural Gas, told Parliament in July that the union government's tax receipts on petrol and diesel increased by 88% to Rs 3.35 lakh crore in the fiscal year ending March 31, 2021 (2020-21 fiscal) from Rs 1.78 lakh crore the previous year.

In the pre-pandemic fiscal year 2018-19, excise collections totalled Rs 2.13 lakh crore.