Diesel Costs More Than Petrol in Odisha – Here’s Why

On Monday, the diesel price in Bhubaneswar was at Rs 80.40 per litre, higher than the price of petrol by 13 paise.

Published22 Oct 2018, 08:49 AM IST
India
2 min read

With the price of diesel being higher than that of petrol for the last three days, a rather odd situation has risen in Odisha.

On Monday, 22 October, the price of diesel in state capital Bhubaneswar was at Rs 80.40 per litre, higher than the price of petrol which was at Rs 80.27 per litre. This defies the usual trend across the country of petrol being priced higher than diesel, since the latter attracts lower taxes, lower dealer commissions and lower base price.

WHY IS THIS HAPPENING?

Responding to this situation, Utkal Petroleum Dealers Association general secretary Sanjay Lath said this was the first time the price of diesel had surpassed that of petrol in Odisha, reported PTI.

Lath said while other states have different VAT rates for petrol and diesel (with the rate being lower for diesel), Odisha charges a uniform 26 percent VAT on both.

He claimed there has been a decline in the sale of diesel in Odisha because of its high price.

Another aspect to be factored in while seeing the fuel price dynamics in Odisha is the rise in the base price for diesel – which is charged by oil companies from dealers excluding the tax – by approximately Rs 5, reported The Times of India. This higher base price has nullified the impact of lower dealer commissions and lower excise duty charged for diesel.

THE POLITICS BEHIND THE PRICES

With diesel becoming costlier than petrol in Odisha, the ruling Biju Janata Dal (BJD) and opposition Congress on Sunday blamed the "faulty" policy of the central government for the rise in price of diesel, reported PTI.

“This imbalance is mostly due to the faulty policy of the BJP-led NDA government in the Centre... There could be a tactical understanding between the central government and oil marketing companies.”
Odisha Finance Minister SB Behera, as quoted by PTI

Behera feared that the prices of essential commodities will also go up because of the increase in diesel price.

Senior Congress leader Arya Gyanendra reportedly said, "There is an inefficient government at the Centre which failed to regulate fuel price, particularly diesel..."

Meanwhile, BJP state general secretary Prithviraj Harichandan responding by saying, "Finance minister (Behera) should be judicious while making a statement on an important issue. Everybody in the country knows the reason behind the rise in the prices of fuel. While 13 states have reduced VAT on the fuel, the Odisha government is yet take a decision in this regard."

Oil Minister Dharmendra Pradhan, who is from Odisha, on Sunday asked the state government to reduce the rate of VAT to give relief to people.

(With inputs from PTI and The Times of India.)

Liked this story? We'll send you more. Subscribe to The Quint's newsletter and get selected stories delivered to your inbox every day. Click to get started.

The Quint is available on Telegram & WhatsApp too, click to join.

Stay Updated

Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.

Join over 120,000 subscribers!