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Fuel prices jump again on Feb 23; 5 states have so far cut taxes to cool off rates

While the Centre has refused to cut excise tax, five states have come forward to reduce the taxes that state governments levy on fuel.

Representational Image (Picture/ANI)

The fuel prices in the national capital region jumped again, as Petrol and diesel saw another revision after Saturday (February 20). Petrol in Delhi will now cost nearly Rs 91, standing at Rs 90.83 per litre. The price rise of 25 paise was recorded for petrol on Tuesday (Feb 23), while Diesel will now retail for Rs 81.32 per litre, up by 35 paise today (Feb 23), respectively.

The prices which had seen a rapid increase for 12 straight days till Saturday (Feb 20) since February 9, brought brief relief to consumers when it stabled for two days on Sunday and Monday. However, the happiness was short-lived as prices on Tuesday again saw a hike of more than 25 paise.

While the Centre has refused to cut excise taxes which currently account for more than 35 per cent for Petrol and Diesel, five states have come forward to reduce the taxes that state governments levy on fuel.

Nagaland has given relief by cutting the rate of tax on petrol and other motor spirits. As per reports, the taxes have been reduced from 29.80 per cent to 25 per cent per litre or from Rs 18.26 to Rs 16.04 per litre (whichever is higher). The tax rate for diesel is reduced from Rs 11.08 to Rs 10.51 per litre or 17.50 per cent to 16.50 per cent per litre (whichever is higher).

Meanwhile, Meghalaya also announced the huge cut of Rs 7.4 per litre on petrol and Rs 7.1 on Diesel to ease the burden of consumers. Meghalaya has also cut VAT by Rs 2 per litre for petrol and diesel. Following Meghalaya, another Northeastern state Assam has announced to slash an additional tax of Rs 5 on fuel to cool off fuel prices in the oil producing state. This was levied by the state during the COVID-19 crisis in order to generate revenue.

West Bengal on Sunday (Feb 21), announced a cut in VAT on fuel. For both petrol and diesel the state government slashed rates by Re 1 per litre. In January, Rajasthan had announced a reduction of (VAT) to 36 per cent from 38 per cent.

Now all eyes are on the Centre, which has not reduced excise duty on fuel since 2018. Many experts have been urging the government to rethink their tax slabs for fuel, which is by far the highest in the world. Interestingly, Centre had refused to reduce taxes even when crude was trading below $ 20 per barrel during the COVID-19 crisis. Both excise duty and VAT make up more than 60 per cent of fuel’s retail price in India. With crude trading close to $ 63 per barrel, many states are expected to cut taxes to pass relief on to the customers.

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