The Delhi government on Tuesday announced an increase in the value-added tax levied on petrol and diesel, resulting in a sharp rise in the prices, a day after the countrywide lockdown to contain the coronavirus outbreak entered its third phase. A litre of petrol in the Capital will now cost Rs 71.26 and diesel will cost Rs 69.39.
The value-added tax on petrol was increased from 27% to 30% while the tax levied on diesel was nearly doubled to 30% from the original 16.75%. This means the government has increased the price of petrol by Rs 1.67 per litre and the cost of diesel was raised by Rs 7.10.
The announcement came after Oil Minister Dharmendra Pradhan on Monday said the demand for fuel is “set to recover” as the Centre has announced major relaxations on industrial activity and movement of people, according to NDTV.
In spite of being categorised as an essential service, the sale of petrol and diesel have fallen drastically during the lockdown as industries and offices shuttered their doors and the country came to a near standstill. Petrol sales were down by 61% and diesel by 56.5% in April, according to Mint.
Oil-marketing companies have not made any changes to the base selling price of both petrol and diesel since March 16. However, faced with the massive revenue losses, several state governments have increased the taxes levied on fuels, which are currently out of the purview of goods and services tax, leading to a rise in the prices.
In Haryana, the state government recently increased the tax levied on petrol by Rs 1 and for diesel by Rs 1.1 for every litre. In Chennai, the price of petrol went up by Rs 3.25 per litre and that of diesel by Rs 2.50 per litre after the Tamil Nadu government hiked the value-added tax imposed on fuel.
India has recorded 46,433 coronavirus cases and 1,568 deaths as of Tuesday morning. In the last 24 hours, India has reported 3,900 fresh cases and 195 deaths. This is the highest single-day jump so far.