NEW DELHI: The price of petrol in Delhi may get reduced by Rs 1.50 with chief minister Sheila Dikshit indicating a possible cut in value added tax on the fuel to provide some relief to people.
This will be on the lines of Congress governments in Kerala and Uttarakhand. After the diesel hike in 2011, the state government had reduced the VAT component by 37 paise.
“We will provide Delhiites with some relief. Earlier as well when the petrol price had been increased, we had reduced VAT. We are thinking on same lines. I will speak on Monday when I present the budget for 2012-13,” Dikshit said on the sidelines of a Metro review on Friday.
This came two days after a steep hike by the oil companies in petrol prices. The Congress had later asked its state governments to give some tax relief to make petrol cheaper.
Without specifying the quantum of the possible relief, Dikshit said on Friday that her government was examining the issue. “We had given relief last time when price (of diesel) was hiked,” she said. “Wait till Monday for my budget.”
Following a hike of Rs 3.37 per litre of diesel in June last year, Delhi government had slashed the rate by 37 paise, removing the 12.5% VAT component on the hiked amount.
Officials indicated that the government may cut the 20 VAT component on the hiked amount of Rs 7.54 which will bring down the rate of per litre of petrol by Rs 1.50. After the hike on Wednesday, the price of petrol had gone up to Rs 73.18 per litre from Rs 65.64.
Dikshit, however, justified the steep hike saying oil companies were incurring huge losses and the hike was necessary.
Federation of All India Petroleum Traders said that if the state government reduced VAT, it would be a welcome relief.
“We had met the Delhi CM before the hike, raising the issue of reducing VAT as it makes up a significant component of the taxes on the fuel. She had agreed,” Ajay Bansal, general secretary of the federation, said.