PM Modi Requests States to Reduce VAT on Petrol
Yesterday on 27th April, PM Modi hosted an online meeting with CM’s of all the states to discuss the current situation of Covid-19 in the country- Watch full story.
With the rising cases of Coronavirus in the country, and experts suggesting it to be the 4th wave of the pandemic in India. Yesterday on 27th April, Prime Minister Narendra Modi hosted an online meeting with Chief Ministers of all the states to discuss the current situation of Covid-19 in the country. In the review meeting hosted by the Prime Minister, Modi told the chief ministers and senior officials of various states to be very careful about covid-19 and not to forget that the virus is still between us and the pandemic is not yet over.
After Modi was done talking about the Pandemic and the current Covid-19 situation he later started talking about high prices of Petrol and diesel. Before we tell you what Modi said, here’s a small recap.
The price of petrol includes the price of petrol + Excise Duty + VAT. VAT - Value added tax - is a tax charged by the state government & Excise is by the Central Government to generate profit. If VAT & Excise is reduced the price of petrol automatically falls. Modi in November last year had slashed excise duty on petrol by Rs 5, on diesel by Rs 10 and asked the states to also cut VAT.
All the states reduced VAT except for 7 states : Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand & Tamil Nadu. I am sure many of you own cars & bikes, but do you know how much VAT & Excise duty you are paying? Do you know the real price of petrol? Keep watching. Now I will tell you the price breakdown of petrol in Mumbai & Delhi as of 7 April 2022. After buying crude oil from the international market,
Price of Crude Oil ?49.33 per Litre
OMC Processing Cost ?7.25 per Litre
(Oil factory cost, transport, etc.)
Fuel Price after Processing ?56.58 per Litre
(Ready to send to Petol Pump)
Excise Duty + Road Cess ?27.9 /l
as Charged by Central Government
(after Excise Duty Cut in November.
This is same across India.)
Commission to Petrol Pump Dealers ?3.8 per Litre
Cost as on 7th April 2022 ?88.28 per Litre
VAT : Mumbai 32.19
Final Retail Price as on 7th April 2022 in Mumbai ?120.47 per Litre
VAT : Delhi ?17.13 per Litre
Final Retail Price as on 7th April 2022 in Delhi ?105.41 per Litre
So this is the real breakdown of the price of petrol and now you know the importance of VAT & Excise Duty.
Now as you all know the petrol & diesel prices in the international market have gone through the roof. One of the main reasons is the Russia Ukraine war. And there is nothing India can do. Now during the meeting the prime minister requested the remaining 7 states who had not reduced VAT, to reduce it now. So that the price falls. “I am just appealing to you to implement what should have been done six months ago,” Modi told the CMs of these states. However this request of Prime Minister Modi on the reduction of VAT by states has not been very well taken by the opposition. As the CM of Delhi, Arvind Kejriwal was seen making disrespectful gestures showing that he is not interested in listening to Narendra Modi’s request, these gestures can be clearly seen in a 19 second video later shared by Delhi BJP on twitter with the caption “Mannerless CM of Delhi”. The opposition leaders criticized Modi’s request and many said there are states even where BJP is in power have not reduced VAT percentage in the fuel prices. As usual there is a political drama and the common man is suffering. What do you think about this whole story, do let us know in the comment section below.
