Diesel In Delhi To Cost Less Than Petrol Again, Govt Reduces VAT

Diesel in Delhi will cost less than petrol once again, since the Delhi Cabinet today announced a reduction in value-added tax (VAT) on the fuel from 30 percent to 16.75 percent.

This 13.25 percent reduction would mean a reduction of Rs. 8.36 per litre of Delhi diesel cost, thus bringing the price down from Rs. 81.94 to Rs. 73.58, excluding the possible upward price revision that oil marketing corporations can make.

Back in May, the Delhi government had increased VAT on auto fuels to the tune of three percent on petrol (from 27 percent to 30 percent) and 13.25 percent on diesel (from 16.75 percent to 30 percent).

Petrol on the other hand will continue to cost Rs. 80.43 as no changes were made to the VAT imposed on the fuel which stands at Rs. 18.56 per litre.

The VAT on diesel however, was higher than petrol at Rs. 18.98, which has reduced now and hence the reduction of Delhi diesel cost.

We do not know if the three percent VAT hike on petrol that came about in May will be revised or not. This is a welcome move from the Delhi government and would reduce the burden that people had to endure for quite a while.

While the Delhi government has reduced tax on diesel, other governments which also hiked taxes in the recent past citing the need for more revenue would do well to follow the national capital’s move.

Delhi Diesel Cost

• Delhi government reduced value-added tax (VAT) rate on diesel
• VAT comes down by 13.25 percent, a reduction of Rs. 8.36
• VAT on diesel goes back to the level it was before the May 5 hike