After excise duty cut, fuel prices down by over Rs 2

October 04, 2017 14:03

Petrol price was today cut by Rs 2.5 per litre and diesel by Rs 2.25 following the reduction in excise duty on auto fuels.

Petrol in Delhi now costs Rs 68.38 a litre, down from Rs 70.88. A litre of diesel now comes for Rs 56.89 as against Rs 59.14 previously, according to Indian Oil Corp, the nation's largest fuel retailer.

The government had yesterday cut excise duty on petrol and diesel by Rs 2 per litre each to moderate the relentless rise in fuel prices over the last three months.

IOC Director (Finance) A K Sharma said the cut in retail selling price is higher after factoring in its impact on VAT.

As things stand, excise duty is levied on fuel produced ex-refinery. Local sales tax or VAT is levied on the total of ex-refinery cost plus excise duty and commission paid to dealers.

So, till yesterday the VAT on petrol in Delhi was Rs 15.07 while today it stands at Rs 14.54. On diesel, VAT today is Rs 8.41 per litre as against Rs 8.73 previously.

The excise duty cut paused the relentless rise in rates witnessed since July 4. While petrol prices had increased by Rs 7.8 to reach Rs 70.88 a litre in Delhi yesterday, the highest since August 2014, diesel rates had risen by Rs 5.7 to touch an all-time high of Rs 59.14.

The excise duty cut would cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year that ends on March 31, 2018, the government had said yesterday.

The government, which had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices, has been criticised for not cutting excise duty despite a sustained rise in fuel prices since early July. -- PTI

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