For dousing the burning issue of high fuel prices in Punjab, the Chief Minister Capt Amarinder Singh has convened a special meeting on Friday to discuss the issue.
The move comes on the day the Central Government announced a cut of Rs 2.50 in the prices of both petrol and diesel, and appealed to the states to follow the suit. Soon, NDA-led governments in 11 states, including the neighbouring Haryana and Himachal Pradesh, too announced similar reductions. Punjab, which has the highest value added tax (VAT) rate on petrol in the region, would take a call on the issue on Friday in a high level meeting of the officials of Excise and Taxation and Finance Departments with the Chief Minister.
During the meeting, the government would access the implications and impact of the Centre’s suggestion to states on reducing fuel prices.
It has been learnt that soon after the Centre announced the cut, Capt Amarinder, who was in New Delhi on Thursday, spoke to the Finance Minister Manpreet Badal asking him to make a detailed presentation on the issue, after which decision would be taken.
The decision comes days after the northern states of Punjab, Haryana, Himachal, Uttar Pradesh, UT Chandigarh, in its meeting on September 25 agreed to fix uniform tax rates on petroleum products, amid rising fuel prices and cross-border transfer of revenues.
As per available data, Punjab witnessed a petroleum revenue loss by Rs 175 crore in the financial year of 2018. Punjab was the only northern state to register a decline by earning Rs 5,658 crore by March 31, 2018, as compared to Rs 5,833 crore petroleum revenue it earned in 2016-17.
Its neighbouring states Haryana, Rajasthan, J&K, Himachal and Delhi registered a positive growth. The State Government was already mulling to reduce the VAT on diesel and petrol by one percent.
At 35.12 percent, Punjab has among the states having highest VAT rate on petrol. The current VAT rate on diesel in the state is still higher compared to neighbouring Himachal and Chandigarh.
However, Punjab had reduced the levy from 17.36 to 16.62 percent in 2017-18, making the diesel marginally cheaper in the state compared to Haryana, Rajasthan and J&K.
Presently, tax on diesel is 16.74 percent, while the rates in Haryana, Himachal Pradesh, Delhi and Chandigarh stand at 26.25 percent, 24.43 percent, 27 percent and 19.74 percent, respectively.
Centre on Thursday reduced the excise duty by Rs 1.50, while Re one would be absorbed by the oil making companies.
After the Centre’s announcement, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh, Chhattisgarh, Tripura, Jharkhand, Assam, Arunachal Pradesh, Himachal Pradesh and Haryana too announced Rs 2.50 per litre cut in fuel prices. Jammu and Kashmir, which is currently under the Governor’s rule, also announced a reduction of Rs 2.50 on fuel prices.