Pradhan asks Odisha government to reduce VAT on diesel

BHUBANESWAR: Union petroleum minister Dharmendra Pradhan on Tuesday asked the Odisha government to reduce value added tax (VAT) in order to regulate diesel price which is more than that of petrol in the state. Pradhan said this a day after the Odisha government blamed the wrong policies of the Centre for the situation.

"The only reason behind high price of diesel in Odisha is due to high VAT rate in the state," the Union minister told reporters on the sidelines of a conclave on steel.

Replying to a question, Pradhan said that while the diesel prices in other states remain less than petrol, rates are high in Odisha because of higher VAT.

Diesel is costlier at Rs 80.36 a litre in Bhubaneshwar on Tuesday as compared to Rs 80.21 per litre for petrol.

On the allegation made by Odisha's finance minister S B Behera, Pradhan said: "SB Behera is saying what is being told. The base price of fuel is in declining trend."

Behera on Monday had pointed out that the base price of diesel is nearly Rs 5.13 higher than petrol. He said the base price of petrol was Rs 48.89 and diesel Rs 44.72 in 2014, while in 2018 the base price of petrol stands at Rs 43.08 against Rs 48.21 for diesel.

Pradhan said Odisha's revenue generation has increased to Rs 7,000 crore now from Rs 3,000 crore per annum in 2014 on account of the high VAT rate.