After lot of pressure from public and opposition, the government has reduced the basic excise duty on petrol and diesel by Rupees 2 / Liter. As said in notification, This price change is applicable effective from today ( 4th October 2017 ). Central Government also advised state government to reduce the VAT on the petrol diesel price in their respective states. This Basic Excise duty reduction will bring net loss to the extent of Rs. 25000 Crore in the Tax collection budget.
After the revision of Excise duty, petrol diesel price rates are stand as follows in Indian metros
Revised Petrol diesel price after the Excise duty change
|New Delhi||68.38||56.89||Rs. /Ltr|
Petrol diesel price before the Excise duty Revision
(Prior to 04-Oct-17)
|New Delhi||70.88||59.14||Rs. /Ltr|
Government has worried about the raising inflation in last few months and decided to cut the excise duty on the petrol and diesel by notable number. The inflation has raised from 1.8 % to 3.4 % in the last month ( July to Aug’17) due to the price increase of many commodities. Also many criticized government for not reducing the petrol diesel price irrespective of the global crude oil price crash last year. All these factors are played major role in these kind of price reduction move.
Further, many of the experts seeks state governments to reduce the VAT on the petrol & diesel to desired level, to bring down the essential products price in the market, which may also reduce the inflation to some extent. Half of the Retail price in petrol diesel contributed by the tax portion of central and state government. For example in Delhi, The central government collects Rs. 22.05 / Litre as the central excise tax and state government collects Rs. 14.9 /Litre as VAT, which contributes to the total tax of Rs. 35 / Litre against Petrol price of Rs. 70 /Litre.
The discussion on petrol diesel price started few weeks ago, due to the marginal crude oil price increase in global market.