The price of diesel in Delhi is set to fall from Rs 82 to Rs 73.64 per litre after a major cut in VAT.
Diesel in Delhi is set to get cheaper by as much as Rs 8.36 per litre, as Chief Minister Arvind Kejriwal’s Delhi state government on Thursday announced a massive cut in VAT. With the value-added tax cut from 30 per cent to 16.75 per cent, diesel price in Delhi will now fall to Rs 73.64 per litre from Rs 82 per litre earlier. In an interesting chain of events, the diesel prices in Delhi had surpassed the petrol prices for the first time in history, after increasing consecutively for 18 days in June.
The steep surge in diesel prices can be attributed to the Delhi government’s decision to increase VAT on diesel from 16.75 per cent to 30 per cent and that on petrol from 27 per cent to 30 per cent. This led to an increase in the price of diesel by Rs 7.1 a litre and petrol by Rs 1.67 a litre. The Delhi government had raised VAT on fuel in order to offset the losses incurred due to the coronavirus-led lockdown.
Meanwhile, as global oil demand tumbled due to the lockdown in various countries, the crude oil market saw a bloodbath and the crude prices nosedived. In such a situation, the centre and the state governments raised the tax on fuel and assured that increased tax would not affect the retail consumers. However, as the crude prices recovered, the retail price of petrol and diesel started to escalate and reached to record levels. On one hand, while the government had been offering cash to the needy and poor section of the society, high fuel prices increased the pain of transporters and the common man.