Petrol, diesel dearer by ₹3

CHANDIGARH: From Thursday, Chandigarh residents will have to shell out around ₹3 extra for petrol and diesel, after the UT administration increased VAT on fuel to 5%. With the hike, the price of petrol is now ₹68.62 per litre (hike of ₹2.8) and diesel is ₹62.02 per litre (hike of ₹2.72). However, fuel prices in Chandigarh are still a notch below that of its neighbouring states.

The new rates of VAT on petrol is “22.45% or fixed rate of ₹12.58 per litre, whichever is higher” and on diesel VAT is “14.02 % or fixed rate of ₹7.63 per litre, whichever is higher”. The earlier rates of VAT on petrol and diesel were 17.45% and 9.02% respectively.

After the hike in VAT, these new prices will come into effect from Wednesday midnight.

“Revenue generation has been hit hard amid the epidemic. We are also mulling over imposing additional cess on liquor to generate revenue, which we will announce soon,” a senior UT official said.

With the jump, the administration will get additional VAT revenue of approximately ₹100 crore this financial year, ie 2020-21.

UT adviser Manoj Kumar Parida said: “Petrol and diesel prices are determined by oil companies and the Centre. UT only decides the VAT rate. Today, VAT on fuel was hiked by 5 %. All money will go to the Consolidated Fund of India, which finances all our developmental expenses.”