The petrol prices have been hiked by a minimum of Rs. 2.40 per litre and diesel by Rs. 2.36 after the Finance Minister of India – Nirmala Sitharaman said in her Union Budget 2019 speech that fuel prices are all set to rise.
The petrol prices in Delhi have been increased by Rs. 2.45 per litre to Rs. 72.96/- and the price of diesel has been increased by Rs. 2.36 per litre to Rs. 66.69/- In Mumbai, the petrol price went up by Rs. 2.42 to Rs 78.57/- and diesel price was hiked by Rs. 2.50 per litre to Rs. 69.60/-
While people in Kolkata will be paying Rs. 2.40 more to get 1 litre of petrol at Rs. 75.15, the petrol price was raised by Rs. 2.57 to Rs. 75.76 a litre in Chennai. The rates will vary from State to State, subject to incidence of local sales tax or Value Added Tax (VAT). In Delhi, VAT is charged at 27% on petrol and 16.75% on diesel. In Mumbai, VAT on petrol is 26%, plus Rs 7.12 a litre additional tax and 24% on diesel.
The prices will also vary by a few paise at pumps operated by other State-owned fuel retailers, Bharat Petroleum Corp Ltd. (BPCL) and Hindustan Petroleum Corp Ltd. (HPCL).
In her maiden budget speech, Nirmala Sitharaman said, “Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol and diesel. I propose to increase Special Additional Excise duty and Road and Infrastructure Cess each by Rs two a litre on petrol and diesel.”
She said that the increased prices will help Government to raise Rs. 24,000-28,000 crores on an annual basis.
Before the price increase, the total excise duty on petrol was in tune of Rs. 17.98 per litre (Rs. 2.98 as basic excise duty, Rs. 7 as special additional excise duty and Rs. 8 as road and infrastructure cess). This has now gone up to Rs. 19.98 per litre. Besides, the total excise duty on diesel was Rs. 13.83 per litre (Rs. 4.83 as basic excise duty, Rs. 1 as special additional excise duty and Rs. 8 as road and infrastructure cess). With the new prices, this has been increased to Rs. 15.83 per litre.
For the records, the excise duty on petrol and diesel have been raised 10 times and reduced only 2 times, since Narendra Modi led Bhartiya Janta Party (BJP) came to power at Centre in 2014. Between November 2014 and January 2016, the Central Government has raised the excise duty on petrol by Rs. 11.77 a litre and that on diesel by Rs. 13.47 a litre in 9 instalments.
