Fuel Prices Rise Again: Government Blames State VAT for High Petrol Costs
Third fuel price hike this month: Centre says VAT driving high petrol prices in Opposition-ruled states
Moneycontrol
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India has experienced its third fuel price hike this month, with petrol prices rising due to the Value Added Tax (VAT) imposed by state governments. The Centre claims that states with the highest VAT, particularly those governed by the opposition, contribute significantly to the rising costs, while BJP-ruled states maintain lower prices.
- 01The Centre states that petrol prices in Andhra Pradesh, Telangana, and Kerala exceed ₹112 per litre due to high VAT rates.
- 02Andhra Pradesh imposes a VAT of 31%, plus additional charges, bringing the effective rate to nearly 35%.
- 03In contrast, six BJP-ruled states maintain petrol prices at or below ₹102 per litre.
- 04The recent price hike is attributed to a sharp increase in global oil prices following the US-Iran conflict.
- 05The latest adjustments saw petrol in Delhi increase by 87 paise to ₹99.51 per litre and diesel by 91 paise to ₹92.49 per litre.
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India's petrol and diesel prices have risen for the third time this month, with the government attributing the increases to the Value Added Tax (VAT) imposed by state governments. The Centre highlighted that it absorbed the impact of rising global oil prices for 76 days, limiting the cumulative increase to under ₹5 per litre, which it claims is the lowest in the world. The government noted that states with the highest VAT rates, particularly Andhra Pradesh, Telangana, and Kerala, have petrol prices exceeding ₹112 per litre. In contrast, states governed by the Bharatiya Janata Party (BJP) have managed to keep prices at or below ₹102 per litre. For instance, Andhra Pradesh charges a VAT of 31% plus additional levies, pushing the effective rate close to 35%. The latest price adjustments have seen petrol in Delhi rise by 87 paise to ₹99.51 per litre and diesel by 91 paise to ₹92.49 per litre. The government criticized opposition states for not reducing their VAT despite calls for a cut in central excise duties.
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The ongoing fuel price hikes will directly affect consumers in opposition-ruled states, leading to higher transportation costs and potential inflation in goods and services.
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