Prices of petrol and diesel increased in Guj by Rs 2 per litre

The Gujarat government on Monday announced hike in the prices of petrol and diesel each by Rs 2 per litre, which it said was necessary in view of a "significant" dip in revenue amidst lockdown and to tide over the COVID-19 crisis.

The Gujarat government on Monday announced hike in the prices of petrol and diesel each by Rs 2 per litre, which it said was necessary in view of a "significant" dip in revenue amidst lockdown and to tide over the COVID-19 crisis. The move is expected to generate Rs 1,500-Rs 1,800 crore income for the state, said deputy chief minister Nitin Patel, who also holds Finance portfolio.

He said the new rates will come into effect from midnight tonight. While the price of petrol per litre stood at Rs 73.

88 per litre on Monday in Gujarat, the price of diesel is Rs 72.12 per litre. "The fuel hike step is being taken in view of the state revenue dipping significantly due to coronavirus- enforced lockdown while the state expenditure going up to fight the COVID-19 crisis," he told reporters.

Patel said the estimated loss in revenue could be Rs 24,500 crore to Rs 26,000 crore. "The main revenue of the state comes from GST. While the estimated income from GST is pegged at Rs 55,560 crore in the current financial year, it will fall considerably due to the lockdown. The state is also yet to receive the GST compensation from the Centre," Patel said.

He said the estimated revenue from VAT on fuel in the current fiscal is Rs 23,230 crore, "however we expect a shortfall of 30-35 per cent up to Rs 8,500 croes in the VAT income from fuel this year. "Another major source of income for the state government is stamp duty collection. Though the projected income is Rs 8,000 crore, we expect a fall of 45-50 per cent in this collection this year," the dy CM said.

On the other hand, the state government had to spend a huge amount for providing free food to the poor as well as migrants, he said, adding that the state has also given the economic package worth Rs 14,000 crore to revive the economy. He said the government also had to send migrants back by trains after the Centre's approval.

"The state government also decided to borne the total expenses on medical treatment of COVID-19 patients. At the same time, the government's regular expenses include Rs 4,600 crore in monthly salary and pensions," Patel said. He said the government appointed a committee headed by former union finance secretary Hasmukh Adiha which suggested some ways to boost the revenue.

"State's core team met under chief minister Vijay Rupani on Sunday and the decision to hike the price of petrol was taken," Patel said. He claimed that prices of petrol are the lowest in Gujrat compared to Rs 83.82 per litre in Madhya Pradesh, Rs 83.60 per litre in Maharashtra and Rs 83.14 per litre in Rajasthan.

He said prices of diesel in Gujarat stands at 16th place in the top-down order. "Against this background, we decided to increase prices of petrol and diesel by Rs 2 each from midnight tonight," he said.

Patel said the state government had deceased the fuel price in 2017 nd 2018 when the international crude oil price had come down.