The Punjab government has increased value-added tax (VAT) on petrol and diesel, thereby making an upward revision in fuel prices from June 11, 2023, as per notification issued by the state excise and taxation department.
With the current VAT increase, the prices of petrol and diesel have risen by 92 paise and 88 paise, respectively. Petrol and diesel now retail at ₹98.95 per litre and ₹89.25 per litre, respectively, in Mohali.
In comparison, petrol and diesel retail at ₹96.20 per litre and ₹84.26 per litre in the capital city UT Chandigarh, while in neighbouring Himachal Pradesh, petrol and diesel retail prices are ₹96.29 per litre and ₹85.44 per litre, respectively.
Meanwhile, petrol and diesel prices are steady today across major cities of the country like New Delhi, Kolkata, Mumbai, and Chennai. In the National Capital of Delhi, petrol and diesel retail at ₹96.72 per litre and ₹89.62 per litre, respectively. In Mumbai, petrol and diesel prices per litre stand at ₹106.31 and ₹94.27 per litre, respectively.
Despite a steady fall in global crude oil prices, fuel prices have not reduced for retail customers in India since last year. Public sector oil marketing companies (OMCs) have not increased the prices of petrol and diesel since 6th April 2022. Oil marketing companies, which suffered heavy losses due to high crude prices last year, will take more time to recover from these losses.
Global crude oil prices, which peaked at $139 per barrel after the Russia-Ukraine war in March 2022, have now dropped to $75-76 per barrel. Crude oil prices have registered a decline on Monday ahead of the US Federal Reserve meeting. Brent crude futures dropped 29 cents to $74.5 per barrel, while US West Texas Intermediate (WTI) was trading 24 cents down at $69.93 per barrel.
Prices of petrol and diesel in the country have been market-determined with effect since 2010 and 2014, respectively. Since then, the public sector oil marketing companies (OMCs) take appropriate decisions on the pricing of petrol and diesel.
The contribution to the central exchequer from excise duty on petroleum products in 2022-23 stood at ₹2.03 lakh crore. The government's collection of total excise duty with cesses on petroleum products, including petrol and diesel, stood at ₹3.63 lakh crore in FY22.
The GST council in its 45th meeting held on 17th September 2021, had considered the inclusion of petrol and diesel and other petroleum products under the GST regime but the matter was deferred by the council till larger deliberations on account of its heavy repercussions on the exchequer.