Finally, here is some relief for the people of Uttarakhand in terms of fuel prices. In a major development, Uttarakhand government has announced that it cut 2% cess and 2% VAT on petrol and diesel prices. The development was confirmed by Uttarakhand Finance Minister Prakash Pant. The decision comes within hours after Gujarat and Maharashtra government slashed VAT (value added tax) on retail fuel.
Earlier, on Tuesday, after Gujarat, Maharashtra government had also slashed VAT on retail fuel, cutting petrol prices by Rs 2 per litre and diesel prices by Re 1 per litre respectively, effective midnight Tuesday. After the new rates come into effect, petrol will cost Rs 75.58 per litre and diesel will cost Rs 59.55 in the state.
Prior to Maharashtra, Gujarat reduced the value-added tax (VAT) on petrol and diesel by 4%, becoming the first state to announce a reduction in the VAT. The effective price of petrol in Gujarat will be Rs 66.53 per litre and that of diesel Rs 60.77 per litre.
The decision to slash prices by these states was taken after the Finance Ministry asked chief ministers to cut retail VAT rate on petrol and diesel by as much as 5%, following an excise duty cut of Rs 2 per litre on both, last week.
Following the slashing of the excise duty on petroleum products, Oil Minister Dharmendra Pradhan had urged state governments to cut VAT on these products by 5 percent for passing on more relief to consumers.