Petrol, diesel prices cut by Rs 2, but VAT spanner in Delhi
Petrol and diesel prices were cut by Rs 2 per litre, excluding local levies, with effect from midnight on Wednesday. The move came after global oil prices fell on Wednesday as investors digested the likely impact of increasing Iranian fuel exports at a time of heavy oversupply.business Updated: Jul 16, 2015 03:10 IST
Petrol and diesel prices were cut by Rs 2 per litre on Wednesday, excluding local levies, in the second reduction of rates this month by oil companies, but the petrol would actually become costlier in Delhi due to an increase in VAT rate.
The new rates announced by the oil marketing companies are effective from midnight of July 15/16.
"Since last price change, there has been a decrease in international prices of both petrol & diesel. The rupee-dollar exchange rate has also appreciated during this period. Combined impacts of both these factors warrant the said downward revisions," Indian Oil Corp (IOC), the nation's largest oil company, said.
Price of petrol was last cut on July 1 by 31 paise per litre and diesel by 71 paise a litre.
No joy for Delhi customers
Consumers in Delhi however will not be able to get the benefit as the Arvind Kejriwal government raised Value Added Tax on the two fuels, offsetting the reduction.
Petrol price in Delhi will go up by 28 paise a litre after the hike in VAT hike from 20 to 25 per cent.
Diesel price in delhi will be reduced only by 50 paise per litre after VAT on the fuel was raised from 12.5 per cent to 16.6 per cent.
Petrol in Delhi will now cost Rs 66.90 per litre instead of Rs 66.62 at present. A litre of diesel will cost Rs 49.72 per litre as against Rs 50.22 earlier.
The Delhi government said the decision was taken to bring uniformity in fule rates across northern states, and that with this hike the retail price of diesel in Punjab, Haryana and Delhi will be almost the same.