Why Petrol, Diesel Prices Are Set To Come Down In Mumbai

A decision to reduce VAT on fuel will be taken in the state cabinet, Chief Minister Eknath Shinde informed the House, while replying to a debate after he won the floor test

Outlook Business Team

Updated on: 4 July 2022 8:09 pm

Petrol and diesel have become really expensive for the people in the past few months, especially after the prices of crude oil skyrocketed amid the Russia-Ukraine crisis.

However, it seems the petrol and diesel prices are set to come down in India’s financial capital as the state government will reduce Value Added Tax (VAT) on fuel soon, Maharashtra’s new Chief Minister Eknath Shinde informed the State Assembly on Monday

A decision to reduce VAT on fuel will be taken in the state cabinet, Shinde informed the House, while replying to a debate after he won the floor test.

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Petrol and diesel are usually the most expensive in Mumbai as compared to other major cities in the country. This is because the state tax on fuel is much higher than in other states.

On Monday, Prices of petrol and diesel remained stagnant across the country for the 43rd consecutive day on Monday, July 4, 2022.

In Delhi, petrol continued to retail at Rs 96.72 per litre, while diesel stands available for Rs 89.62 per litre. In Mumbai, one litre of petrol is priced at Rs 111.35, while a litre of diesel is priced at Rs 97.28.

Petrol and diesel prices may come down after the state government slashes VAT on fuel. This will bring relief to the common man reeling under high prices of everyday commodities.

The last time people had a breather from high fuel prices was on May 22 when the central government cut the central excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre to bring down fuel prices in the country.

The announcement, made by finance minister Nirmala Sitharaman on Twitter, came in the backdrop of spiralling inflation in the country which has triggered a rise in the prices of essentials

Since fuel prices tend to have a direct impact on retail goods, a reduction in excise duty is expected to tame the prices of essential commodities.

India's fuel consumption jumped 23.8% in May from a year earlier, continuing a recovery from a relatively low base in 2021 when the world's third-biggest oil consumer was in the grip of the second wave of Covid-19.