Pay ₹5 less for petrol from today
MUMBAI: In the footsteps of the Centre’s decision to cut petrol prices by ₹2.5 a litre, the state government on Thursday reduced the surcharge by another ₹2.5 a litre, taking the effective reduction to ₹5 a litre.
The reduction of ₹2.5/litre from the existing surcharge of ₹9/ litre will cost the state an annual loss of ₹1,800 crore. Price of petrol and diesel in Mumbai on Thursday was ₹91.34/litre and ₹80.10/ litre. The reduction in the price of petrol is expected to come into effect from 6am on Friday. Although the Centre has announced a reduction of ₹2.5/ litre in diesel prices as well, Maharashtra has not taken any call yet. Following the Centre’s decision, chief minister Devendra Fadnavis tweeted saying, “Thank you Hon PM Narendra Modi ji and Union Minister Arun Jaitley ji for reducing ₹2.50/litre on both diesel and petrol. This will give huge relief to common citizens. Maharashtra government also decided to give additional relief of ₹2.5/litre on petrol
to give total benefit of ₹5/litre in the state.” The government has however stated that it is also considering reduction of the surcharge and the value added tax (VAT) on diesel soon. It is likely to remove the surcharge on diesel in the state. Finance minister Sudhir Mungantiwar said the decision will be taken by assessing
the gravity of the lingering threat of the drought in Marathwada. “We were on number eight in the country in terms of cost of diesel cost and among top five in terms of cost of petrol. The cost of fuel in Maharashtra is high due to the cess levied for roads under the IRDP.”
The state’s decision to not reduce price of diesel has however irked transporters who use the fuel. “The transportation is still done using diesel trucks. Unless the reduction is also for diesel, there is no respite,” said All India Motor Transport Congress leader Bal Malkit Singh. “We will have to hike fare of tourist taxis and buses by at least 10-12%,” said Mallik Patel, leader of bus operators and tourist taxi fleet owners.
The state is hesitant to reduce the VAT on diesel as the amount of diesel consumed is significantly more than that of petrol. According to finance department officials, the annual burden amounts to ₹1,150 crore for every rupee reduced. Moreover, the state would end up losing the VAT on the central excise reduced by the Centre. “The annual burden due to the drop in state VAT is ₹1,250 crore, while another loss of ₹550 crore will have to borne owing to drop in collection from reduced central excise. Thus, the immediate burden may amount to ₹1,800 crore if VAT on diesel is slashed,” said UPS Madan, additional chief secretary, finance department.