Diesel To Be Cheaper By Over Rs 8 In Delhi, VAT Cut To 16.5%: Arvind Kejriwal

Currently, the price of diesel is Rs 81.94 per litre in Delhi, much higher compared to petrol, which is at Rs 80.43 per litre.

Delhi Chief Minister Arvind Kejriwal said traders and industrialists had demanded a cut in VAT

Highlights

  • Delhi Chief Minister announces reduction in VAT to 16.75% from 30%
  • Diesel to be cheaper by more than Rs 8 per litre in national capital
  • VAT cut to help propel Delhi's economy, says Arvind Kejriwal
Delhi Chief Minister Arvind Kejriwal on Thursday announced a reduction in value added tax or VAT applicable to diesel to 16.75 per cent, which would bring down the price of the fuel by more than Rs 8 per litre in the national capital. Until now, the value added tax was at 30 per cent in Delhi. Currently, the rate of diesel is Rs 81.94 per litre in the metro, almost 2 per cent higher compared to petrol, which is at Rs 80.43 per litre. Diesel has remained more expensive than petrol in Delhi for past few weeks.

Here are 10 things to know:

  1. The move on value added tax will help propel Delhi's economy, the Chief Minister said while announcing the rate cut through a virtual press briefing.

  2. Reviving Delhi's economy is a serious challenge, but will be achieved with the cooperation of people, Mr Kejriwal said. The Chief Minister said traders and industrialists had demanded a cut in VAT.

  3. The price of diesel will come down to Rs 73.64 a litre with the reduction in VAT, he said. The decision was taken in a meeting of the Delhi Cabinet chaired by the chief minister. 

  4. With effect from 6 am on Thursday, the price of diesel was at Rs 81.94 per litre in Delhi, and that of petrol at Rs 80.43 per litre.

  5. The gap between petrol and diesel rates has been increasing in the metros over past few days, with diesel remaining costlier than petrol in the national capital. 

  6. Petrol and diesel prices are determined broadly by crude oil and forex rates, and vary in different parts of the country due to the incidence of VAT or value added tax.

  7. The retail fuel prices - the price that the consumer pays for fuel in different parts of the country - are calculated by adding excise duty, dealer commission and VAT on the rate applicable to dealers 

  8. State-run Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum review the prices on a daily basis, and implement any revisions with effect from 6 am. The three account for the majority of fuel stations in the country.

  9. A crash in travel demand due to the spread of the coronavirus pandemic has hurt oil markets. Currently, global crude oil prices hover around the $44 per barrel mark. 

  10. Though Brent crude futures - the global benchmark for oil rates - have recovered from a 21-year low of $15.98 per barrel registered in April, they are still down 33 per cent so far this year.