Petrol-Diesel / Petrol, diesel prices to drop by ₹10 & ₹5/litre from Nov 7 midnight: Punjab CM

Chandigarh: Ahead of next year's assembly polls, the Congress-led government in Punjab on Sunday announced a reduction in the Value Added Tax (VAT) on petrol by ₹10 and on diesel by ₹5 from tonight. 

“We have decided to decrease petrol and diesel prices by ₹10 per litre and ₹5 per litre, respectively," said Chief Minister Charanjit Singh Channi.

"Petrol in Punjab has become cheapest in the region. As compared to Delhi, petrol in Punjab is now ₹9 less," the state chief minister said.

At present, the petrol and diesel rates in Punjab are ₹106.20 and ₹89.83 per litre respectively.

The Shiromani Akali Dal, Bharatiya Janata Party and the Aam Aadmi Party had been demanding the state government to reduce tax on fuel to provide relief to consumers.

Meanwhile, the total incidence of taxes on petrol has come down to 50 per cent and that on diesel to 40 per cent following a reduction in excise duty by the central government, and by a slightly higher proportion in states that have also cut local sales tax or VAT on the fuel.

The retail price of petrol and diesel is decided after adding central excise, commission paid to dealers and value-added tax (VAT) to basic oil prices. The basic oil price is the prevailing international benchmark rate plus freight.

Buckling under pressure, the Centre had last week cut excise duty on petrol by ₹5 per litre and that on diesel by ₹10 a litre to give reprieve to consumers battered by record-high retail fuel prices.

This has led to BJP and its partner-ruled states witnessing steeper reductions in petrol and diesel prices in comparison to Maharashtra, Delhi, West Bengal and other states that are governed by other political parties, according to a price chart of different locations prepared by state-owned oil firms.