The Delhi High Court will hear on Wednesday a plea by a Delhi-based designer, seeking the court's intervention to check runaway fuel prices on grounds that petrol and diesel are essential commodities and the government must ensure a fair price for consumers. In Maharashtra, apart from 25 percent and 21 percent Value Added Tax (VAT) on petrol and diesel respectively, the government has also introduced Rs 9 and Re 1 as various cess on petrol and diesel respectively. "While crude prices are plummeting in global markets, the increase of fuel prices in India is disheartening".
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"The increase in petrol and diesel prices is likely to give States a windfall gain of around ₹22,700 crore over and above the budget estimates for the current fiscal".
President Sanjay Deshmukh told IANS that while petrol was almost touching the psychological barrier of Rs 90 per litre (at Rs 89.97), diesel prices stood at Rs 77.92 on Monday.
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"A $1/barrel increase in oil prices, translates in a revenue of Rs 1,513 crore to all major (19) states", said the note authored by SBI's Group Chief Economic Adviser Soumya Kanti Ghosh. The new petrol and diesel prices will be applicable from Tuesday morning (September 11).
Rajasthan and Andhra Pradesh have already pared rates. However, this will result in a revenue loss of around Rs 12,000 crore (net of Rs 34,627 crore loss and Rs 22,700 crore gain from oil bonanza) to the states. And now after Rs 2 cut in each, it may be sold around Rs 83.60 and 77.22 per litre, respectively. Petrol price has now crossed Rs 89 a litre in Maharashtra. "Though many States are having a revenue surplus, they use the surplus revenue to finance capital expenditure and interest obligations, " the report said.
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