Petrol, diesel in Delhi to cost more despite Rs2 per litre reduction in prices

State-run oil marketing companies have effected a Rs2 per litre reduction in the retail price of petrol and diesel effective midnight 15 July.

While the reduction in the selling price of petrol and diesel is excluding state levies, Indian Oil Corporation, the country's largest oil distributor said in a release.

However, petrol in Delhi has become costlier after the state government decided to increase VAT (value added tax) rate on the two fuels with effect from Thursday.

After the revision, petrol price in Delhi would be costlier by Rs2.78 (approximately) per litre, while diesel would dearer by Rs1.83 (approximately) per litre.

This means petrol will be costlier by at least 78 paise while diesel prices will remain more or less unchanged in Delhi.

The VAT rate on petrol has been increased to 25 per cent from 20 per cent and on diesel to 16.6 per cent from 12.5 per cent.

The move is aimed at bringing uniformity in the tax rates and now the retail price of diesel in Punjab, Haryana and Delhi will be almost the same. 

The effective retail price of petrol, even after this hike however will be lowest in Delhi as compared to neighbouring states, including Haryana and Punjab.

Oil companies fortnightly revise fuel rates based on international oil prices, which is still due.

Prices of petrol and diesel were last revised on 1 July 2015.

Since then, there has been a decrease in international prices of both petrol and diesel.

Rupee-dollar exchange rate has also appreciated during this period. Combined impacts of both these factors warrant the current downward revisions, IOC said.