New Delhi -°C
Today in New Delhi, India

Nov 28, 2020-Saturday
-°C

Humidity
-

Wind
-

Select Country
Select city
ADVERTISEMENT
Home / Budget / Day after Budget, petrol, diesel price hiked by Rs 2/litre

Day after Budget, petrol, diesel price hiked by Rs 2/litre

On Friday, the cost of petrol and diesel was Rs 67.40 a litre and Rs 76.15 a litre in Mumbai and Rs 64.33 and Rs 70.51 a litre in Delhi, respectively.

budget Updated: May 29, 2020, 03:08 IST
Bindisha Sarang
Bindisha Sarang
Hindustan Times, Mumbai
A fuel station attendant fills out the prices on board, in Guwahati, Friday, July 5, 2019. Petrol price will be hiked by over Rs 2.5 per litre and diesel by more than Rs 2.3 after Finance Minister Nirmala Sitharaman today raised taxes on the fuels to part-fund her Budget for 2019-20.
A fuel station attendant fills out the prices on board, in Guwahati, Friday, July 5, 2019. Petrol price will be hiked by over Rs 2.5 per litre and diesel by more than Rs 2.3 after Finance Minister Nirmala Sitharaman today raised taxes on the fuels to part-fund her Budget for 2019-20. (PTI Photo)

Fuel prices were revised across the country on Saturday after finance minister Nirmala Sitharaman, in her 2019-20 budget, proposed to increase the excise duty and cess of Re 1 per litre on petrol and diesel.

“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 1 a litre on petrol and diesel,” Sitharaman said in her budget speech.

On Friday, the cost of petrol and diesel was Rs 67.40 a litre and Rs 76.15 a litre in Mumbai and Rs 64.33 and Rs 70.51 a litre in Delhi, respectively.

 Also Watch | Budget 2019 | Petrol and diesel cess increased by Re 1 per litre

Post considering local sales tax or value added tax (VAT), which is charged after adding central excise duty on base price, the increase in petrol price would be over Rs 2.5 per litre and that on diesel would be Rs 2.3.

“If this proposal is implemented, the government may be expecting additional revenue to the tune of Rs 12,663 crore in one year,” Abhishek Bansal, chairman of ABans Group of Companies, an investment manager, wrote in a note Friday.

Consumers, too, can expect a significant hit to their wallets. The retail price of fuel consists of the price oil retailers charge dealers to which excise duty, value-added tax (VAT) and dealers’ commission are added.

“For consumers, this will increase fuel prices by significant margins as right now fuel attracts excise duty and VAT {value -added tax} if is levied on it. And the VAT depends on the state, and varies,” said Ashok Shah, a partner at N.A. Shah Associates LLP.

Last year, the government ruled out a reduction in the excise duty levied on petrol and diesel. In the past few years , periodic increases in excise duty resulted in higher central government revenues.

Since January 1 this year, domestic fuel prices have changed very little. Rates of petrol and diesel have risen by Rs 1.67 and Rs 1.86 a litre.

“This move may give huge revenue, but it will not only hurt consumers, but will also result in high inflation,” Shah said.

According to Anuj Gupta, deputy vice president–commodities and currencies research, Angel Broking, the cost of transportation may increase and have a direct impact on commodity prices.

ht epaper

Sign In to continue reading