Left with dwindling coffers due to COVID-19 lockdown, the Delhi government has increased the Value Added Tax (VAT) on petrol and diesel in the national capital from Tuesday to mop up resources that resulted in a hike in prices of petrol and diesel.
Petrol now costs Rs 71.26 a litre, an increase from Rs 1.67 from Rs 69.59 while diesel is priced at Rs 69.29, which is an increase of Rs 7.10 from Rs 62.29 after the increase in VAT.
The VAT on petrol was increased from 27% to 30% while that of diesel rose from 16.75% to 30%.
This comes close on the heels of the order to impose a 70% 'Special Corona Fee' on sale of liquor in retail outlets across the capital.
Both the orders were issued on Monday night and they came into effect from Tuesday.
The move attracted criticism from Congress and BJP with both the parties demanding a withdrawal of the decision.
Senior Congress leader Ajay Maken said it is a shame when the citizens are seeking relief in the form of cash and tax cuts. Nowhere in the world, any government would have inflicted such hardships on their citizens, he added.
Delhi BJP spokesperson Praveen Kapoor “strongly condemned" the increase in VAT on fuel and demanded its withdrawal.
Kejriwal on Sunday had said that economic activities needed to be opened up in the capital as it has caused a severe economic crisis. He said the government used to garner a revenue of Rs 3,500 crore usually in the month of April but last month it could raise only Rs 300 crore.
He had said that it would not be sufficient even for paying salaries.
Several state governments have raised the tax on petrol and diesel in recent times as the COVID-19 lockdown has drastically affected resource mobilisation after economic activities were halted since March 25.
In Haryana, tax on petrol and diesel was hiked by Rs 1 and Rs 1.10, recently.
The rise in fuel prices came despite the crude prices coming down drastically following COVID-19 pandemic shutting markets.
With the rise in petrol and diesel prices, the prices of essential commodities and other items are expected to further rise, as transportation charges would increase. Already, the common man has been feeling the pinch as the supply of commodities shrunk following the lockdown resulting in a hike in prices of commmodities.