Delhi Govt. Cuts Petrol Price By Rs. 1.26/Litre, Hikes CNG Price by Rs. 1.75/Kg


Delhi Chief Minister has announced a reduction on the VAT on the petrol price hike in the state of New Delhi n 28th May 2012 which will bring down the price of Petrol by a mild Rs. 1.26 / Litre opposed to the recent petrol price hike by oil companies of Rs. 7.50 Per Litre. There has been a lot of protest and unrest against the steepest ever hike in the petrol prices across India. Indian consumers who use petrol vehicles, automobile companied who make petrol cars and two wheelers and industry experts are all protesting the steep hike.

In a recent series of state level tax cuts on petrol prices to provide some relief from the steep price of petrol, many state governments have announced price cut in petrol price by cutting state taxes and VAT. In the recent announcement, New Delhi Govt. has provided some relief of Rs. 1.26 per litre (approximately 1.7% cut) on the petrol price in Delhi. On the flip side, the VAT on CNG in Delhi has gone up by 5% which will increase the prices of CNG in Delhi which were earlier Rs. 35.45 per kg to Rs. 37.20 per Kg up by Rs. 1.75 per Kg (up by approximately 4.96%). This is like providing some benefit to petrol consumers by putting additional burden on CNG users. This is expected to have some opposition from Auto Rickshaw drivers in Delhi as almost all of them ply on CNG fuel along with Delhi public transport buses run by state and private bodies.


There are also many private vehicles (cars and commercial good carriers) which use CNG as primary fuel which are likely to bee impacted by the hike. The magnitude of the hike in the price of CNG in Delhi is however mild compared to the recent hike in Petrol.

The recent hike in petrol prices has however further increased the demand for diesel cars in India which is already close to 70% of the total car sales. The car makers have also started offering special offers and discounts on the petrol cars to increase the low sales of these cars. Major car makers like Maruti Suzuki and Hyundai have accelerated their efforts to increase diesel engine capacity in India to cater to the increase demand of diesel cars in India. With diesel price deregulation expected to be implemented in India, it may give another shock to car buyers as the running costs of diesel cars may also increase in coming years by increase in price of diesel. Stay tuned for latest updates from Car Blog India.