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Petrol prices rises in New Delhi on sales tax hike

NEW DELHI: Prices of some petroleum products, including petrol, have gone up in India's capital of New Delhi, following a hike in sales tax, newspapers reported.

The revised prices come into effect from Sunday, they said.

The Economic Times said the price of petrol has risen to Rs. 26 per litre from Rs.24, diesel to Rs.14.04 per litre from Rs.13.91 and cooking gas would now cost Rs.154 a cylinder against 148.

The price of kerosene, distributed through the public distribution system, has gone up to Rs.2.70 a litre from 2.60, the Financial Express reported.

It said the revision in sales tax was due to the shift to a uniform sales tax across the country this year. Earlier states charged different rates of sales tax.

The Economic Time quoted Petroleum Minister Ram Naik as saying that the federal government was unlikely to increase the prices of petrol and diesel before the budget, normally presented to parliament at the end of February.

Naik told the paper his ministry had asked the Finance Ministry for 70 billion to 80 billion rupees to bridge the oil pool deficit.

The oil pool deficit is the amount owed by the government to its oil firms for selling oil products below cost price, a policy aimed at helping the poor.

"As per the earlier formula, it (petrol prices) was to be revised every two months. But after studying the matter, I felt import duty rises with price hike, so I suggested to the finance minister to reduce the oil pool account deficit by allocating Rs 70-80 billion excess available from import duty and he is considering it," Naik told the Economic Times.

The last revision in prices was in October, when the federal government raised the retail price of diesel by more than a third.-Reuters