State governments slash petrol prices by reducing VAT!

Delhi, Goa, Uttarkhand and Kerala governments have announced a small price cut by reducing VAT on petrol prices. The new prices will make the petrol cheaper by around Rs. 1.50 per litre giving some relief to the consumers.

Delhi cuts petrol price by Rs. 1.26 per litre

The Delhi government has announced a reduction in petrol price by Rs. 1.26 per litre. As per the announcement the new petrol price is Rs. 71.92 per litre (as on May 29^th, 2012) whereas earlier the price was Rs. 73.18 per litre (as on May 24^th, 2012).

However, the Delhi government has hiked the tax on CNG and hence the price of CNG has increased by 4.96%). To be precise, the new price of CNG is now Rs. 37.20 per Kg (as on May 29^th, 2012) while, the price was earlier Rs. 35.45 per Kg. Overall, while the Rs. 1.26 per litre petrol price cut is good news, the Rs. 1.77 per Kg hike in CNG is a bad news for all CNG users in Delhi.

Kerala cuts petrol price by Rs. 1.63 per litre

Kerala government has announced a price cut by Rs. 1.63 per litre of petrol the day after the central government announced the price hike of Rs. 7.50 per litre on May 23^rd, 2012. However, it is yet to be known as to when this price cut will be to put into effect. As on May 24^th, the petrol price in Kerala was Rs. 74.11 per litre.

Uttarkhand cuts petrol price by Rs. 1.87 per litre

Uttarkhand government announced a petrol price cut by Rs. 1.87 per litre. After the Rs. 7.50 per litre petrol price hike announced by the central government on May 23^rd, 2012, the state government took a decision in its cabinet meeting on the next day and announced this price cut. Now, the petrol price in Uttarkhand is Rs. 73.36 per litre.

Goa slashes petrol price by Rs. 11 per litre

Goa government has slashed the petrol price cut by Rs. 11 per litre which nullified the Rs. 7.50 per litre price hike ordered by the central government. The state government is able to offer petrol price at a cheap rate by abolishing the VAT (value added tax) on petrol.

As per the Goa government, the VAT on petrol is a mere 0.1 per cent just adequate to keep a sale record. At present, the petrol in Goa is sold at Rs. 65 per litre, the lowest among all other states in the country.

The central government is planning to convince the state governments to lower the Sales Tax or Value Added Tax (VAT) on fuels so as to give a bit of relief to the consumers. Last year, the central government had cut down the tax on fuels and likewise, it expects the state government to lower the tax.  If this happens, ultimately, the petrol price may get reduced by Rs. 5 per litre.

Summing up, in the coming months, the state governments may announce petrol price cuts, and if this happens it will definitely bring a sigh of relief for all petrol-powered vehicle owners.