Punjab slashes petrol, diesel prices by Rs 10, Rs 5 per litre

The Congress-led government in Punjab on Sunday announced a reduction in value added tax (VAT) on petrol and diesel, making them cheaper by Rs 10 and Rs 5 per litre respectively in the state.

The new rates will be effective from midnight. Currently, petrol and diesel rates in Punjab are Rs 106.20 and Rs 89.83 per litre respectively.

The move, which will cost the state nearly Rs 6,000 crore, comes days after the BJP-led central government reduced excise duty on petrol and diesel, and several other states, including Haryana and Himachal Pradesh, slashed VAT rates on the fuels to give relief to consumers.

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The decision to reduce VAT on fuel was taken in a Cabinet meeting chaired by Punjab Chief Minister Charanjit Singh Channi.

Addressing the media here, Channi said the Cabinet has taken a major decision of reducing rates of fuel in order to provide relief to the people of Punjab.

"We are reducing rate of petrol by Rs 10 per litre and diesel by Rs 5 per litre from midnight," he said.

Channi claimed that such a big rate cut is unheard of in the last 70 years.

"People of Punjab may consider it a Diwali gift. We will be giving them more such gifts (major public welfare announcements) in the future.

"People have been burdened so much in the past years, but we are taking steps to provide relief to the people in every sector," he stated, pointing at decisions like reduction in electricity rates taken by his government.

Assembly polls in Punjab are due early next year.

Channi further claimed that after the reduction, the rate of petrol in Punjab will be the lowest among the northern states for the first time in 20 years.

"We are close to UT Chandigarh in rates, but our rates are cheaper by big margins as compared to other states," he said.

After 20 years, diesel in Punjab will be cheaper than Haryana, Channi said, claiming that petrol in Punjab is cheaper than Delhi.

Channi also hit out at the BJP-led government at the Centre, alleging that ever since it came to power, the rates of petrol and diesel have been shooting up.

He further alleged that the government at the Centre “looted” people of the country.

In the last 18 months, diesel has jumped from Rs 61 per litre to 98.50 a litre, the chief minister said.

Initially, the Centre raised fuel prices by Rs 30 a litre and now has reduced it by Rs 5 and Rs 10 a litre to gain words of appreciation, he claimed.

Channi also took a dig at the Akalis for their protest against the state government over fuel prices.

Finance Minister Manpreet Singh Badal said after the reduction in tax, the effective VAT on diesel and petrol will be 9.92 per cent and 13.77 per cent respectively.

Badal said the decision of lowering VAT will cost Rs 6,000 crore of revenue loss annually to the state.

He also demanded that the Centre should reduce taxes other than excise duty on fuel, referring to additional excise duty, special excise duty, surcharge, cess etc.

He claimed that during the past six years, the Modi government has taken away Rs 6 lakh crore of the states' share.

Badal further pointed out that the lowering of excise duty on fuel by the Centre will result in a revenue loss of Rs 900 crore to the state.

The government of India should not put the burden of its “financial or economic mismanagement” on the states, he added.

Badal said states have the responsibility of carrying out several welfare measures for people.

"Education, health, police arrangements, jail arrangements, canals, old age allowance, power, water, and all welfare measures are the responsibility of states. When they usurp states' share, they are not taking it from states but from the people of India," he said.

Badal said fuel prices in the country were low despite high crude prices in the international market during the Manmohan Singh-led government at the Centre.

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