Nagpur: There’s good news for residents of Nagpur as rates of petrol and diesel will go down a bit with the government abolishing local body tax (LBT ) on both the fuels. The decision will hit those living in rural areas as cost of the two fuels has gone up by 2 per litre outside city limits. Now, the rates of fuel are same in the city and rural areas.
The present rate of petrol within city limits is 68.27 a litre and outside 64.88 a litre. Diesel costs 52.10 per litre within city limits and 48.76 a litre outside. After taking all components into consideration, petrol will cost 1.65 per litre less for city-dwellers while diesel will cost 1.40 per litre less. This means that petrol will now cost 66.62 a litre while diesel’s 50.70 a litre. These rates are unofficially provided to TOI by oil marketing companies. Exact rates will be known only after government issues a notification.
The government had to take a hit of 280 crore if LBT was not replaced by any other tax. Moreover, a sharp fall in fuel prices had reduced VAT collection by 300 crore per month. As it needed 1,600 crore for drought relief, the government decided to impose a 2 a litre flat cess on the fuel. The petrol dealers had in principle supported such a tax during their talks with state finance minister Sudhir Mungantiwar.
Nagpur Municipal Corporation (NMC) stands to lose from abolition of LBT on petrol and diesel as it used to collect over 50 crore annually on sale of these fuels. The cess will be collected by the state government. It is not clear whether the government will compensate the local bodies for loss of LBT revenue on fuel.
Petrol dealers are not happy with the cess. “Mungantiwar had proposed to increase VAT slightly to compensate for LBT revenue and that too on petrol. The cess of diesel will cause huge loss to pump owners of the state as trucks will prefer to get filled up in other states,” said HS Bhatia, a pump owner.
