Punjab sees biggest reduction in petrol price, Ladakh on diesel

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Congress-ruled Punjab has seen the biggest reduction in price of petrol in the country after it cut local sales tax or VAT the most while Union Territory of Ladakh witnessed the largest reduction in diesel rates for the same reason.

Post the Union government’s decision of reducing excise duty on petrol by Rs 5 per litre and that on diesel by Rs 10 a litre, 25 states and UTs have cut VAT to give further reprieve to consumers battered by record-high retail prices.

Petrol price has been further reduced by as much as Rs 16.02 per litre and diesel by Rs 19.61 a litre as a result of combined impact of the excise duty and VAT cut, according to price charts available from state-owned fuel retailers.

Poll-bound Punjab has seen the most cut in petrol price of Rs 16.02 a litre, followed by UT of Ladakh with Rs 13.43 a litre and Karnataka (Rs 13.35).

The VAT reduction in Punjab is Rs 11.27 per litre on petrol while in Uttar Pradesh, which will go to polls early next year to elect a new government in the state, the reduction is Rs 6.96. Gujarat has seen Rs 6.82 a litre reduction in VAT while Odisha has cut sales tax by Rs 4.55 and by Rs 3.21 in Bihar.

Diesel has seen the most reduction in Ladakh where rates have come down by Rs 9.52 per litre because of a cut in VAT on top of Rs 10 a litre fall in excise duty. Karnataka has cut VAT by Rs 9.30, followed by Rs 9.02 reduction in Puducherry.

Punjab has cut Value-Added Tax (VAT) on diesel by Rs 6.77 a litre while Uttar Pradesh has cut the tax by the second lowest level of Rs 2.04.

Uttarakhand has cut VAT on diesel by Rs 2.04 a litre and Haryana by Rs 2.04. Bihar has reduced VAT by Rs 3.91 and Odisha by Rs 5.69. Madhya Pradesh cut tax on diesel by Rs 6.96 a litre.

The states/UTs that extended additional VAT benefits are Ladakh, Karnataka, Puducherry, Jammu & Kashmir, Sikkim, Mizoram, Himachal Pradesh, Daman & Diu, Dadra & Nagr Haveli, Chandigarh, Assam, Madhya Pradesh, Tripura, Gujarat, Nagaland, Punjab, Goa, Meghalaya, Odisha, Arunachal Pradesh, Manipur, Andaman & Nicobar, Bihar, Uttarakhand, Uttar Pradesh and Haryana.

States that have so far not lowered VAT include Congress and its allies ruled Rajasthan, Chhattisgarh, Maharashtra, Jharkhand and Tamil Nadu. AAP-ruled Delhi, TMC-governed West Bengal, Left-ruled Kerala, TRS-led Telangana and YSR Congress-ruled Andhra Pradesh have also not cut VAT.

Since states charge local sales tax or VAT not just on the base price but also on the excise duty levied by the Centre, the total incidence of price reduction was higher than Rs 5 a litre cut in excise duty on petrol and Rs 10 per litre cut in diesel. The reduction was larger in states with higher VAT.

In Delhi, the reduction in petrol price was Rs 6.07 per litre, and that on diesel was Rs 11.75, according to the price chart. Petrol costs Rs 103.97 a litre and diesel is priced at Rs 86.67 per litre.

There have been no changes in retail selling price since the excise duty cut was implemented from November 4.

After duty changes, the costliest petrol is sold in Rajasthan at Rs 111.10 per litre (Jaipur), followed by Mumbai (Rs 109.98) and Andhra Pradesh (Rs 109.05). The fuel is below Rs 100-a-litre-mark in most BJP-ruled states barring Karnataka (Rs 100.58), Bihar (Rs 105.90), Madhya Pradesh (Rs 107.23) and Ladakh (Rs 102.99).

Diesel is costliest in Rajasthan at Rs 95.71 a litre, followed by Andhra Pradesh (Rs 95.18) and Telangana (Rs 94.62).