After liquor tax, Delhi hikes petrol by ₹1.67, diesel ₹7.1/L
nNEW DELHI: Retail prices of petrol and diesel in Delhi surged on Tuesday after the city-state’s government steeply increased value-added tax (VAT), seeking to raise additional money to offset falling revenues and fund the fight against the coronavirus disease (Covid-19), reducing the price gap between the two automobile fuels, state-run oil marketing companies (OMCS) said .
Petrol’s price at the pump increased by ~1.67 per litre to ~71.26 and diesel’s cost rose ~7.10 to ~69.39, according to Indian Oil Corp., India’s largest OMC and refiner.
Delhi’s Aam Aadmi Party (AAP) raised the VAT a day after lockdown restrictions were eased, allowing stand-alone stores to open, the self-employed like plumbers, electricians and domestic servants to return to work, and freer public movement, including the return of vehicular traffic. On Tuesday, the government imposed an additional tax of 70% on all varieties of liquor.
Separately, the Union government announced a hike late on Tuesday night of its component of excise duty on petrol by ₹10/ litre and on diesel by ₹13/litre, but the move will not lead to higher prices.
“Since crude oil prices were low and retail prices were frozen, OMCS were raking in additional money which will now go to the government,” said an official, asking not to be named. Retail prices were frozen on March 16 and crude oil prices have fallen steeply since.
As Delhi’s residents reeled under the double whammy, Delhi’s deputy CM and finance minister Manish Sisodia tweeted: “Life isn’t all about rainbows and sunshine. Tough times need Tough solutions - my learning as Finance Minister.”
The government almost doubled the levy on diesel to 30%, OMC executives said. The new VAT rate on petrol is also about 30%.