NEW DELHI: A day after Finance Minister Nirmala Sitharaman announced the imposition of an additional special excise duty of Re 1 per litre and road and infrastructure cess of Re 1 per litre on both petrol and diesel in the Union Budget 2019, prices of the two automobile fuels went up by over ₹2 all over India.
In New Delhi, petrol price shot up by ₹2.45 per litre and diesel went up by ₹2.36 a litre today. Petrol is now retailing at ₹72.96 per litre and diesel at ₹66.69 per litre in New Delhi.
In Mumbai, petrol is priced at ₹78.57, diesel at ₹69.90 per litre. In Bengaluru (Bangalore), petrol costs ₹75.37 and diesel ₹68.88. In Chennai, petrol costs ₹75.76 and diesel ₹70.48. In Kolkata, petrol costs ₹75.15 and diesel ₹68.59.
In Gurgaon or Gurugram, petrol is priced at ₹72.79, diesel ₹65.81. In Noida, petrol is priced at ₹72.27 and diesel ₹65.72.
An increase in excise duty leads to a subsequent increase in VAT or sales tax as the latter is calculated after taking into account the former. This explains why the price of petrol went up by around ₹2.5 while the excise duty and cess, together, was increased only by ₹2.
Nirmala Sitharaman, who presented the first budget of the new Modi 2.0 government yesterday, had said crude prices have softened from their highs, paving way for her to review excise duty and cess on petrol and diesel.
"I propose to increase special additional excise duty and road and infrastructure cess each by one rupee a litre on petrol and diesel," she had said.
Later on, Sitharaman had rejected suggestions that an increase in the prices of petrol and diesel will fuel inflation, saying it was aimed at meeting public funding needs without hurting individual taxpayers and was also a step to move away from fossil fuels to electric vehicles.
Till yesterday, an additional special excise duty of ₹7 per litre was charged on petrol and Re 1 on diesel besides a road and infrastructure cess of ₹8 per litre on both the fuel.
