Bhubaneswar: Petrol and diesel will become cheaper in Odisha from the midnight of November 5 as the State Government has announced reduction of VAT of Rs 3 per litre on the fuels.
The announcement came on November 4, a day after the Central Government reduced excise duty on petrol and diesel by Rs 5 and Rs 10, respectively.
Before the reduction, petrol and diesel price had crossed Rs 110 per litre in all districts of Odisha. The rate has dropped below the Rs 110-mark in most districts after the relaxation.
In view of this reduction, the loss of VAT revenue to the state exchequer will be to the tune of Rs 1400 crore per annum. This is in addition to loss in VAT collection @ Rs 1.6/ litre on petrol and Rs 2.8/ litre on diesel, total amounting to Rs 700 crore, which the state is likely to incur in view of Excise Duty reduction by Government of India.
Hence, the total loss to the state exchequer on account of reduction in VAT is approximately Rs 2000 crore. However, it will provide a major relief to the people of Odisha.
With the decision, petrol and diesel prices in the state are likely to be one of the lowest in the country.
The Centre sweetened Diwali celebrations by announcing that it will slash excise duty rate on both petrol and diesel fuels, thus bringing down retail rates.
The Finance Ministry, in a statement on Wednesday night, a day before Diwali, said: “The reduction in excise duty on diesel will be double that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season.”
“In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure. The world has also seen shortages and increased prices of all forms of energy.”
As per the statement, the Centre has made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet requirements.
“Driven by the enterprising ability of India’s aspirational population, the Indian economy has witnessed a remarkable turnaround post the Covid-19 induced slowdown. All sectors of the economy – be it manufacturing, services or agriculture – are experiencing significant upward economic activity.
“To give a further fillip to the economy, the Government of India has decided to significantly reduce the excise duty on diesel and petrol.”
In addition, the Centre urged state governments to commensurately reduce VAT on petrol and diesel.