Petrol, diesel get Re 1 cheaper in West Bengal as government cuts tax

• Follow

The West Bengal government on Sunday announced a reduction of tax by Re 1 per litre on petrol and diesel with finance minister Amit Mitra expressing the hope that the step would give the people some respite from the rising price of petrol and diesel.

The move would become effective from midnight on Sunday.

The measure by the Mamata Banerjee administration comes close on the heels of the Assam government taking a similar step in the second week of this month that slashed the price of petrol and diesel in the state by Rs 5 per litre.

Both Assam and West Bengal would be going for assembly polls this year and the prices of petro products is expected to feature prominently in the campaign of the parties opposing Bharatiya Janata Party.

“The Centre earns Rs 32.90 per litre in taxes from petrol, while the state gets Rs 18.46 only. In case of diesel, the central government’s earning is Rs 31.80 per litre as against Rs 12.77 for the state,” Mitra said on Sunday.

As much as 60% of the retail price of petrol and about 56% of diesel prices is made up of central and state taxes.

For almost the past fortnight the price of petrol and diesel have been rising continuously and in some states the price of petrol has even breached the Rs 100/litre mark.

Bengal is a fiscally-stressed state with debt repayment obligation of Rs 63,700 crore alone eroding more than 84% of the state’s own tax revenue of Rs 75,415, according to the 2021-22 budget.

Only on Saturday, Union finance minister Nirmala Sitharaman said that the Centre and the states have to find out a mechanism to bring down the retail prices of petrol and diesel.

However, she was noncommittal on whether the Centre would bring down the excise it earns from these products.

Last year the Centre raised central excise duty on petrol and diesel to earn revenues after international crude oil prices dipped to two-decade low.