Punjab is the north western state in India. The city of Chandigarh is the joint capital of Punjab and Haryana. The major cities in the state include Jalandhar, Ludhiana, Patiala, and Amritsar, which are also popular tourist destinations in India.
Diesel Price in Punjab Compared to its Neighbouring States
Compared to the neighbouring states of Himachal Pradesh, Jammu and Kashmir, Haryana and Rajasthan, diesel price in Punjab is relatively low. Except for Rajasthan, diesel price in all other states is almost similar as the state-level taxes levied by the respective governments vary marginally.
Factors Affecting Diesel Rate in Punjab
Diesel price in Punjab is different from that of other states mainly due to the state-specific tax involved. All the states in India levy value added tax (VAT) on diesel and other petroleum products. Whenever there is a revision in the tax, the diesel price in the respective states will get affected and so in Punjab.
Besides VAT, other factors that commonly affect the price of diesel in Punjab and in all other Indian states are the global crude oil price, US dollar to Indian rupee exchange rate, central government taxes, profit margins and other operating costs.
State Taxes and Diesel Price in Punjab
As mentioned earlier, the state government of Punjab levies VAT on diesel. Currently it collects 17.33% VAT on a litre of diesel, which is lowest compared to the tax charged by its neighbouring states.
Diesel Cost versus Petrol Costs in Punjab
As of 12 October 2017, a litre of diesel costs Rs.57.11 in Punjab, and petrol costs Rs.73.42/Lt. The price difference between the two commodities exceeds Rs.16 per litre, which is a matter to ponder on as both the fuels are extracted from the same crude.