Petrol, diesel to get cheaper in Delhi
Petrol and diesel prices are likely to drop again in Delhi compared to adjoining cities of Uttar Pradesh, The ad valorem tax structure will lead to a bigger reduction in daily prices in the national capital. Petrol in Delhi on Tuesday was priced at Rs 71.72 a litre while it stood at Rs 71.15 in Ghaziabad and Rs 71.28 in Noida. A litre of diesel in the national capital is priced at Rs 66.39 as opposed to Rs 65.31 in Ghaziabad and Rs 65.31 in Ghaziabad and Rs 65.44 in Noida.
While petrol and diesel traditionally have been cheaper in Delhi than most states in the country, due to lower local sales tax or VAT, the October 5 cut in the VAT by BJP-ruled states led to fuel being available at cheaper rates in places such as Ghaziabad and Noida - the UP towns that adjoin the national capital.
However, the difference that had peaked to over Rs 3 per litre in case of petrol and about Rs 2.3 in diesel on October 5, has now come down to just 44-57 paisa in petrol and about Re 1 in diesel, an analysis of the daily price revision notification issued by state-owned oil firms showed.
Industry sources said the gap will extinguish in the next few days if the falling trend continues. Fuel in Delhi may by next week turn cheaper in the national capital when compared with adjoining towns, they said.
While the slump in international oil prices has led to an almost equal reduction in base price of petrol and diesel across the country, the actual cut in rates differs from state to state depending on local VAT.
Retail pump price is calculated after adding central excise duty, dealers commission and VAT to the base price. While excise duty is fixed at Rs 17.98 per litre in case of petrol and Rs 13.83 a litre in diesel and do not change with any variation in base price, the incidence of VAT in most states changes as the levy is ad valorem or a percentage of the total of the base price plus central excise duty.