Punjab Hikes VAT on Petrol and Diesel, Fuel Prices To Go Up

Jalandhar: Fuel prices in Punjab are set to increase following the state Cabinet’s decision on Thursday to raise value-added tax (VAT) on petrol and diesel by 61 paise and 92 paise per litre, respectively. This decision was made during a meeting chaired by Chief Minister Bhagwant Mann. Currently, petrol in Mohali is priced at Rs 97.01 per litre, and diesel at Rs 87.21, making fuel more expensive in Punjab than in Chandigarh, where petrol costs Rs 94.24 and diesel Rs 82.40 per litre.

The hike, the third under the Mann-led government in the past two-and-a-half years, has been met with sharp criticism from fuel pump owners, who claim it will affect their business. Finance Minister Harpal Singh Cheema stated that the increase aims to boost the state’s revenue, with Rs 395 crore expected from diesel and Rs 150 crore from petrol.

VAT Increase on Fuel

• Petrol VAT to rise by 61 paise per litre
• Diesel VAT to rise by 92 paise per litre
• Expected revenue: Rs 395 crore from diesel, Rs 150 crore from petrol

Criticism from Fuel Pump Owners

The decision to raise VAT on fuel has drawn flak from fuel pump owners, who argue that it will negatively impact their business, especially in border districts. Monty Sehgal, spokesperson for the Punjab Petrol Pump Dealers' Association, condemned the move, stating that sales will likely shift to neighboring states where fuel prices are lower. 

Mohali-based pump owner Ashwinder Singh Mongia echoed these concerns, warning that the price hike could encourage more "smuggling" of fuel from Himachal Pradesh and Jammu and Kashmir, further reducing the state's tax revenue.