A day after the Centre reduced the excise duties on petrol and diesel, the Maharashtra government on Sunday, May 22, reduced Value Added Tax (VAT) on petrol and diesel by ₹2.08 per litre and ₹1.44 per litre respectively. The reduction was implemented with immediate effect.
With this, the price of petrol dropped by ₹9.16 and that of diesel by ₹7.49 in Mumbai. The petrol was available at ₹111.35 a litre while the diesel was priced at ₹97.28 per litre on Sunday. Meanwhile, on Monday, May 23, after implementing the state government's slashed prices, the petrol is being sold at ₹109.27 and diesel costs ₹95.84.
Despite a drop in the fuel rates across Maharashtra, it is pertinent to note that the prices are still high compared to neighbouring states, especially the BJP-ruled states.
However, this is a natural reduction based on the change in the central taxes. Therefore, it would not be fallacious to say that there is no additional relief from the state.
Owing to this slashing prices, a statement issued by the government, mentioned the state exchequer will have to bear an annual loss of INR 2,500 crores.
Explaining further, it stated that the Maharashtra government is expected to monthly lose ₹80 crores on petrol and ₹125 crores on diesel following the reduction in VAT.
For those unversed, the Union Finance Minister Nirmala Sitharaman on Saturday, May 21, announced a deduction in the excise on petrol by ₹8 per litre and on diesel by ₹6 per litre. Following this, the Maharashtra Chief Minister Uddhav Thackeray had claimed that the Centre’s move to reduce excise duty on petrol by ₹8 per litre and on diesel by ₹6 per litre was not enough.
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