The price of petrol in Uttar Pradesh's Noida will now be cheaper than that in Delhi by more than three rupees. Petrol pumps in the national capital used to cater to customers from neighbouring suburbs as fuel prices in Delhi were always cheaper than those in the adjacent states. Residents of Noida, Ghaziabad and Gurugram were often seen queuing up at petrol pumps in Delhi to get their fuel tanks filled.
With Yogi Adityanath-led Uttar Pradesh government announcing Rs 2.5 cut on VAT (Value Added tax) on both petrol and diesel, fuel prices in country's most populous state are now cheaper than those in Delhi. The price of petrol in Noida will come down to Rs 78.43 from Rs 83.43 earlier whereas diesel will cost Rs 70.69 per litre. In comparison, the price of petrol and diesel in Delhi will go down to Rs 81.50 and Rs 72.95, respectively. In Gurugram, a litre of petrol will now cost Rs 79.57 as compared to Rs 84.57 earlier. Similarly, a litre of diesel will cost Rs 71.47 as compared to Rs 76.47.
Thanking Prime Minister Narendra Modi for cutting excise duty on petrol and diesel, UP CM Yogi Adityanath said the reduction in fuel prices will bring relief to the common man. However, he added that the tax cut on fuel will cost Uttar Pradesh government Rs 4,000 crore in tax revenue.
The state governments in almost all BJP-ruled states including Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Jharkhand, Assam, Haryana, Himachal Pradesh, Uttar Pradesh, and Tripura today reduced the prices of petrol and diesel by Rs 2.5 soon after the Finance Minister Arun Jaitley announced a similar cut in fuel prices. Both petrol and diesel will be cheaper by Rs 5 in these states.
In a press briefing, Finance Minister Arun Jaitley said that the Centre will cut Rs 1.50 in excise duty on fuel while an additional Re 1 will be absorbed by the Oil Marketing Companies (OMCs). Jaitley had also urged the state governments to cut the VAT on fuel by an equal amount. Chief ministers of almost all BJP-run states have heeded to Jaitley's advice and cut down VAT on fuel.
Jaitley further mentioned that the excise duty cut of Rs 1.50 will put a burden of Rs 10,500 crore on the government for the remainder of the fiscal, which is only 0.05 per cent of the fiscal deficit. "We are confident that we will able to absorb this burden with the help of increased collections," he said.
The central government will bear a revenue loss of around Rs 10,500 crore due to today's cut in excise duty on petrol and diesel prices. "Centre's revenue collection is intact due to expansion of tax base not due to rate hike. The total impact of the excise duty cut on us for the entire fiscal would have been Rs 21,000 crore. Since this will be applicable only for around half the fiscal, the decision will put a burden of Rs 10,500 crore on us, which is only 0.05 per cent of the fiscal deficit. Absrobing this burden of Rs 10,500 crore while maintaining the fiscal deficit target, I am confident will not be a problem with the increased collections," Jaitley said.
Justifying the minimal relief in fuel prices, Jaitley said "We have to react to the situation and give relief without impacting the fiscal deficit. We cannot do it at the cost of financial position and give it when it can absorb it."