Petrol price hikes offset 45% relief after VAT slash

JAIPUR: This government had raised taxes when it came to power and after mopping up revenue for 4 years, now it has reduced it and is claiming ₹2,000 crore loss (for exchequer) ARCHANA SHARMA , state Congress spokesperson

Five days after the Rajasthan government slashed value added tax (VAT) on petrol and diesel by 4%, the daily incremental hikes in prices have wiped out 45% of the relief that consumers got on fuel.

On midnight of September 9, petrol prices in Jaipur had come down by ₹2.21 per litre after chief minister Vasundhara Raje announced VAT relief, a day ahead of the nationwide shutdown called by the Congress to protest runaway fuel prices.

With almost daily hike over the past few days and a steep hike of ₹0.35 per litre effective 6 am on Saturday, petrol prices in Jaipur have climbed to ₹82.22 per litre, which is just a shade lower than ₹83.42 on the day VAT was slashed.

So, the prices have since gone up by ₹1.01 wiping out 45% of the ₹2.21 relief that consumers had got on petrol.

The diesel prices, which were slashed by ₹2.19, have climbed up too from ₹75.12 per litre on September 9 to ₹75.95 per litre on Saturday.

Daily revision of petrol and diesel prices has come into effect at all petrol pumps in Rajasthan with effect from June 2017.

State Congress spokesperson Archana Sharma said, “We have already said that 4% reduction in VAT was too less. This government had raised taxes when it came to power and after mopping up revenue for four years, now it has reduced it and is claiming ₹2,000 crore loss (for exchequer). The central govt needs to cut excise duty if any meaningful relief has to be provided to the people.”

In December 2014, the Rajasthan government had raised VAT on both the products by 4%.

Last Sunday, VAT on petrol was reduced from 30% to 26% and on diesel from 22% to 18%. The decision, Raje had said, would cost the state exchequer about ₹2,000 crore.

Raje had made the announcement during a programme as part of her Gaurav Yatra in Rawatsar town in Hanumangarh district.

State BJP spokesperson Mukesh Parikh said, “Petrol and diesel prices are going up as the international crude oil price is rising and the dollar is strengthening against the rupee. Still, the Rajasthan government took the initiative and reduced the taxes. The consumers in the state are paying less as compared to other states.”