Highlights:
- Petrol and Diesel in Delhi are costlier by over ₹ 9 and ₹ 2 respectively than neighbouring states of Uttar Pradesh and Haryana
- Dealers asking Chief Minister of Delhi, Arvind Kejriwal, to cut VAT on Petrol and Diesel
- The monthly average sales of Petrol has come down by more than 25% in 7 years
The Delhi Petrol Dealers Association has written a letter to the Chief Minister, Arvind Kejriwal, wherein they ask to cut the Value Added Tax (VAT) on petrol and diesel. As per the dealers, the reduction in VAT will boost sales and could possibly prevent a financial crisis.
It said that buying Petrol and Diesel in Delhi has become expensive by more than ₹ 9 per litre and ₹ 2 per litre respectively than from neighbouring states of Haryana and Uttar Pradesh.
Anurag Narain, Priseide of Delhi Petrol Dealers Association wrote, “Higher VAT in Delhi will have a negative impact resulting in insurmountable loss of sales of petrol pumps of Delhi and revenue to our state,” in the letter.
Narain further added, “We request Delhi govt to decrease VAT, which might help during elections.
“Then our sales won’t go to other states; sales here have decreased by 50%”.
The letter from the Delhi dealers association also highlighted the VAT structure of Delhi in the last few years. According to the letter written from the dealers association, the VAT on petrol in the national capital has increased to 30% in July 2020 from 20% in 2014.
On the other hand, the VAT on diesel also seen an increase to 16.75% from 12.50% in the same period.
Since 2014, the VAT on petrol and diesel has increased a total of 6 times in the National Capital. The last time the Delhi government increased the VAT was on the 31st of July, 2020, and the VAT was increased on both the fuel types.
In the same duration, the average sale of petrol, per month, has dropped by more than 25%, from 11 crore litres per month to 8 crore litres, according to Narain.
He added that the sales of diesel have more than halved from more than 13 crore litres per month in 2014 to just over 5 crore litres at present.
According to the dealers association of Delhi, the average growth of sales in Delhi’s neighbouring states, such as Haryana and Uttar Pradesh has “double percentage figures” as a result of the increase in VAT.
As of today, the cost of one litre of petrol in Delhi stands at ₹ 104.10 while in Noida it is ₹ 95.49, in Gurgaon ₹ 95.88, and Ghaziabad ₹ 95.24.
Both Uttar Pradesh and Haryana slashed VAT on petrol and diesel by ₹ 12 per litre last week.
The move came as the Centre reduced excise duty by ₹ 5 per litre on petrol and ₹ 10 a litre on diesel amid the spiralling fuel prices.
Preside of the Delhi’s petrol dealer association, Narain, also requested the Chief Minister of Delhi to reduce VAT more than what the state of Haryana and Uttar Pradesh have reduced so that Delhi can boost the sales and revenue. This will also end the smuggling of fuels.
