Rajasthan border district pays ₹100/L for petrol as prices surge

In a first for any place in India, the price of petrol crossed the ₹100/litre mark on Wednesday in the remotest district of Rajasthan, Sri Ganganagar.

The price of petrol touched ₹100.33 on Wednesday in Sri Ganganagar. The corresponding price in Jaipur was ₹95.99. The difference is because of transportation charges levied by oil companies.

Prime Minister Narendra Modi on Wednesday said the middle-class would not have been burdened because of increase in fuel prices if the previous governments had focussed on reducing India’s energy import dependence.

India imported over 85% of its oil requirement in 2019-20 financial year and nearly 53% of its gas, he pointed out.

“Can we be so import-dependent?,” he asked at a virtual event to inaugurate oil and gas projects in poll-bound Tamil Nadu.

On February 14, the price of premium petrol reached ₹102.07 a litre in Sri Ganganagar following which the Rajasthan government reduced the value added tax (VAT) on petrol and diesel. At the time, Rajasthan had the highest VAT rate on fuel among the big states in the country — 36% on petrol and 26% on diesel.

This is on top of the ₹32.90 per litre tax on petrol and ₹31.80 per litre tax on diesel levied by the central government and the new agri-cess. Global oil prices have strengthened in the past few months, resulting in an increase in fuel prices.

In the state assembly on Monday, Rajasthan chief minister Ashok Gehlot said the Centre was responsible for high fuel prices because it was not reducing the taxes. “If we reduce the taxes then our revenue will decline. In view of the public sentiments, despite the pandemic, the state reduced 2 percentage points of VAT resulting in a loss of ₹1,000 crore. Now, the Centre should reduce the taxes to lessen the burden on people,” Gehlot said.

Prices within a state vary on account of transportation costs.

Rajasthan Petroluem Dealers’ Association president Sunit Bagai said there is difference of ₹4.09 a litre in petrol prices between Sri Ganganagar and Jaipur because of this.

In Rajasthan, he added, oil marketing companies charge around ₹3.50 per litre, plus taxes for transportation. The price in Sri Ganganagar is high because the petrol there is supplied from Jaipur or Jodhpur, around 500 km away.

To be sure, oil pricing has been deregulated in India, with the prices being fixed (and changed) by state-owned oil marketers and not the government. As prices declined last year, both Centre and states increased levies to shore up finances in a year when their revenue was under pressure.

Modi said his government is sensitive to the concerns of the middle-class and focussed on raising the share of ethanol mixing in petrol. India, he said, is looking to cut energy import dependence and diversify its sources of energy.

(with PTI inputs)