After a four-month hiatus,  petrol and diesel prices were raised on Tuesday, by 80 paise per litre.  Petrol in Delhi will now cost Rs 96.21 per litre, up from Rs 95.41, while diesel prices will rise from Rs 86.67 to Rs 87.47. 

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In the month of December 2021, the Delhi government decided to reduce the Value-Added Tax (VAT) on petrol, bringing down the price of the fuel in the city by about Rs 8 per litre. The decision was taken in a meeting of the Delhi cabinet chaired by Chief Minister Arvind Kejriwal. 

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Petrol and diesel prices fell dramatically in numerous states in the month of November 2021, as additional states announced Value-Added Tax (VAT) cuts in response to the Centre’s decision to reduce fuel excise tax.

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Petrol and diesel prices in Mumbai, the country’s financial hub, have risen to Rs 110.82 a litre and Rs 95.00 a litre, respectively. In Kolkata, petrol and diesel cost Rs 105.51 and Rs 90.62, respectively, and Rs 102.16 and Rs 92.19 in Chennai.  

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Diesel prices have also dropped significantly as a result of the Centre’s and states’ tax reduction. The Centre’s cut in excise tax, followed by reductions in VAT in various states, has resulted in a dramatic decline in petrol and diesel rates after they had hit an all-time high.

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It should be mentioned that the national government declared an excise duty drop of Rs 5 per litre for petrol and Rs 10 per litre for diesel on the eve of Diwali 2021.

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Following the Centre’s decision, various states, including Odisha, Arunachal Pradesh, Madhya Pradesh, Nagaland, Himachal Pradesh, Karnataka, Mizoram, Haryana, Uttar Pradesh, Gujarat, and Bihar, have reduced VAT on fuel prices. VAT has also been reduced in three Union Territories: Puducherry, Jammu & Kashmir, and Chandigarh.