With inflation touching new heights, consumers can at least look forward to something cheaper.
The Delhi Cabinet on Friday decided to roll back the increase on valued added tax (VAT) on diesel from 20 per cent to 12.5 per cent.
It will make diesel cheaper by Rs 2.50 per litre in the Capital, costing Rs 37.60 a litre. The new rates will come into effect from midnight, July 20.
Delhi chief minister Sheila Dikshit said the government was losing on revenue from diesel after it increased VAT on it in the last budget.
"People were going to neighbouring states like Haryana and UP to purchase diesel," Dikshit said, adding that the rollback would provide relief to the aam admi.
In its budget for 2010-2011, the government had increased VAT on diesel from 12.5 per cent to 20 per cent. After the Centre deregulated fuel prices, fuel had become costlier in the Capital by Rs 3.50 in comparison to Haryana and by 70 paise compared to Uttar Pradesh.
Petrol dealers have been protesting the increase and had even gone on strike a few times. The increase, claimed petrol dealers, robbed them of their business by almost 80 per cent.
But even after the rollback, dealers are not happy.
"Diesel in Haryana will still be cheaper by Rs 1.25. The majority of transporters will continue to buy it from there," Delhi Petrol Dealers Association vice-president Nishit Goel said.
"We want the government to bring prices at par with Haryana."