Fuel Prices to Increase in Punjab: VAT on Petrol and Diesel Hiked by State Government

In a move set to affect consumers and businesses alike, fuel prices in Punjab are set to rise after the state Cabinet, led by Chief Minister Bhagwant Mann, decided to increase the value-added tax (VAT) on petrol and diesel. The decision, made during a meeting on Thursday, will see VAT on petrol rise by 61 paise per litre and by 92 paise per litre for diesel.

Currently, the retail price of petrol in Mohali is Rs 97.01 per litre, while diesel stands at Rs 87.21 per litre. This price hike will make fuel in Punjab significantly more expensive compared to neighbouring Union Territory, Chandigarh, where petrol is priced at Rs 94.24 and diesel at Rs 82.40 per litre.

Fuel pump owners have strongly condemned the AAP-led government's decision, claiming it will negatively impact their businesses. They further noted that this is the third time the Bhagwant Mann administration has raised fuel prices in the past two and a half years.

Addressing the media after the Cabinet meeting, Finance Minister Harpal Singh Cheema stated, "The decision has been taken to raise VAT on petrol and diesel." He elaborated that the increase in VAT will result in additional revenue of Rs 395 crore from diesel and Rs 150 crore from petrol for the state.

However, not everyone is on board with the move. The Petrol Pump Dealers' Association, Punjab, has expressed its dissatisfaction, with spokesperson Monty Sehgal criticising the hike. Sehgal pointed out that the sales of petrol and diesel, particularly in border districts, will be impacted as consumers shift to neighbouring states where fuel is cheaper.

Mohali-based fuel pump owner Ashwinder Singh Mongia echoed these concerns, saying the VAT hike will encourage more smuggling of fuel into the state, which could ultimately reduce the state's tax revenue. He noted that fuel prices in Himachal Pradesh and Jammu and Kashmir are already lower than in Punjab, exacerbating the issue.

With this latest hike, consumers in Punjab will feel the pinch at the pumps, while businesses, especially in border regions, brace for a potential downturn in sales.