Days after the Centre reduced excise duty on fuel, the Congress-led government in Punjab on Sunday lowered the VAT on petrol and diesel making them cheaper by Rs 10 per litre and Rs 5 per litre in the state. The new rates will be effective from midnight.
Chief Minister Charanjit Singh Channi made the announcement while addressing the media after the cabinet meeting. “We are reducing petrol rate by Rs 10 per litre and diesel rate by Rs 5 per litre from midnight,” said Channi.
“Petrol in Punjab has become cheapest in the region. As compared to Delhi, petrol in Punjab is now Rs 9 less,” Channi reportedly said, adding that this “hasn’t happened in 70 years”. State assembly elections are due in Punjab next year.
However, fuel will still be cheaper in Chandigarh with petrol at Rs 94.23 and diesel at Rs 80. Delhi, Uttar Pradesh, Haryana, Rajasthan and Jammu and Kashmir have higher prices. Currently, the petrol and diesel rates in Punjab are Rs 106.20 and Rs 89.83 per litre respectively.
The Shiromani Akali Dal, Bharatiya Janata Party and the Aam Aadmi Party had been demanding the state government to reduce tax on fuel to provide relief to consumers.
In a Diwali bonanza, the Centre had recently slashed the excise duty on petrol and diesel by Rs 5 and Rs 10, respectively, which came effect from Thursday. In a statement, the Government of India had also urged the states to reduce the VAT on petrol and diesel to further provide relief to the consumers.
The decision came as a huge relief to consumers as fuel prices across the country had sky-rocketed in the last few weeks following a global upsurge in crude oil prices. “Reduction in excise duty on diesel will be double that of petrol and will come as a boost to the farmers during the upcoming Rabi season,” the Centre had said, adding that Indian farmers through their hard work had kept the economic growth momentum going even during the coronavirus lockdown and the “massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season”.
After the announcement, ten BJP-ruled states also slashed petrol and diesel prices, namely Assam, Tripura, Manipur, Karnataka, Goa, Uttar Pradesh, Gujarat, Haryana, Himachal Pradesh and Uttarakhand. Assembly polls are due in Uttar Pradesh, Uttarakhand, Goa and Manipur. However, Congress-ruled Rajasthan has refused further price cuts in the state, claiming that the Centre’s November 4 decision automatically reduced the state’s VAT by 1.8 per litre on petrol and 2.6 per litre on diesel. This, CM Ashok Gehlot claimed, would result in a revenue loss of Rs 1,800 crore for the state.
Punjab’s neighbour Haryana, after announcing the cuts, had said, “On the occasion of Diwali, the central government has announced a reduction in prices of petrol and diesel. Taking it forward, the Haryana government has also reduced the rate of VAT on petrol and diesel in the state. Now, both petrol and diesel in entire Haryana will be cheaper by Rs 12 per litre.”
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