Despite reducing value-added tax by Rs 2.50 per litre, the financial capital is still the costliest for petrol
Petrol and diesel prices in Mumbai rose 21 paise and 31 paise on October 8 to Rs 87.50 and Rs 77.37 per litre, according to Indian Oil Corporation (IOC).
Despite reducing value-added tax (VAT) by Rs 2.50 per litre, the financial capital is still the costliest for petrol. Delhi, which is yet to reduce VAT, is still the cheapest of all the metros and bulk of state capitals as it levies lower taxes.
A litre of petrol and diesel in Delhi retails for Rs 82.03 and Rs 73.82 per litre after the respective hike of 21 paise and 29 paise. Kolkata too witnessed a similar price hike, with the motor fuel now retailing at Rs 83.87 and Rs 75.67 per litre, respectively.
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Petrol and diesel prices were cut by a minimum Rs 2.5 per litre on October 5 when the Centre cut excise duty by Rs 1.50 per litre and state-owned fuel retailers provided a subsidy of Re 1 per litre.
Prior to Friday's cut, petrol price had risen by Rs 6.86 a litre and diesel by Rs 6.73 since mid-August - the most in any six-week duration after the daily price revision was introduced in mid-June last year.
A Re 1 per litre price absorption by state-owned fuel retailers would result in an annual Rs 9,000 crore hit on profits, sources said. For the remainder of FY19, it would be Rs 4,500 crore, with IOC's share being roughly half and the rest split equally between Hindustan Petroleum Corporation HPCL and Bharat Petroleum Corporation BPCL, sources added.
Almost half of the retail fuel price is made up of taxes. The Centre, prior to the excise duty cut, levied an excise duty of Rs 19.48 per litre on petrol and Rs 15.33 per litre on diesel. On top of this, states levy VAT.
The hike in duties had led to excise collections from petroleum products rising to Rs 2,29,019 crore in FY18 from Rs 99,184 crore in FY15. States saw their VAT revenue rise to Rs 1,84,091 crore in FY18 from Rs 1,37,157 crore in FY15.(With inputs from PTI)