Following the growing clamour across the country for Central excise duty and state government VAT (value added tax) cuts in the prices of petrol and diesel, which have hit record highs since many months, the Central government has finally reduced fossil fuel prices. At 8.30pm today, the Central government announced an excise duty reduction on petrol and diesel. While the excise duty on petrol will stand reduced by Rs 5 per litre, that on diesel will fall by Rs 10 a litre. The new prices come into effect from midnight of November 4.
After factoring the Rs 5 excise duty duty in a petrol litre and Rs 10 for a diesel litre, the likely fuel prices for the two fuels in Mumbai, Delhi, Chennai and Kolkata are likely to be as below:
As Autocar Professional had reported earlier,October 2021 has set a record when it comes to monthly price increases in the two fossil fuels. While the cost of diesel has risen sharply by Rs 8.78 a litre – or 8.97% – petrol in Mumbai became costlier by Rs 7.55 a litre – or 6.99% last month. (see data chart below).
Petrol and diesel are amongst the most heavily taxed items in the country. If you consider the petrol cost in Delhi, 30% (Rs 32.90) comprises excise duty and 23% (Rs 25.31) is State VAT (Value Added Tax). Club the two taxes and motorists are paying Rs 58.21 or 53% of each petrol litre as tax.
As regards diesel, the excise duty component is Rs 31.80 or 32.81%, while VAT is Rs 14.37 (up from Rs 13.77 on October 15) or 14.60% of the retail price. Together, the two taxes account for Rs 46.17 or 48% of the price a motorist pays to tank up on diesel. In FY2021, the Centre got Rs 334,894 crore excise duty from petrol and diesel
Apart from the fact that rising fuel prices also add to the inflation in the country, it is finally a huge burden for the consumer. The move is expected to provide some relief to the consumers.
Diesel turned costlier by Rs 8.78 a litre, petrol by Rs 7.55 in October