New Delhi: Not only has the price gap between the two automobile fuel has narrowed down to single digits in most cities but diesel has now become costlier than petrol in Goa, Gujarat, Odisha and Andaman and Nicobar Islands. In Goa, diesel costs Rs 2 more than petrol and about Re 1 more in Gujarat, Odisha and Port Blair.
Petrol is now cheaper than diesel in these cities
Under dynamic fuel pricing system which began from June last year, state-run oil marketing companies have gradually brought the price of the two fuel closer from a gap of about Rs 30 just seven years ago. A higher sales tax or VAT imposed by state governments and union territories also contributes to the higher retail price of diesel.
Although Goa imposes moderate tax on both petrol (12.86%) and diesel (15.03%), yet it is heavier by about 2% for the latter. As a result, diesel (Rs 68.61) costs about Rs 2 more than petrol (Rs 70.74) in Goa.
In Ahmedabad and Surat, you pay about Re 1 more for diesel than petrol as VAT is higher by 0.09% all over Gujarat. Petrol is taxed by Gujarat government at 22.19% while diesel is taxed at 22.28%.
The tale is no different in Odisha where tax on petrol is 24.63% and that on diesel is 25.08%. If you buy fuel in Bhubaneswar or Cuttack you pay about Rs 1.2 more for diesel.
In the islands of Andaman and Nicobar, the union territory administration charges the lowest VAT on fuels across India. Although the same rate of 6% is applicable on both petrol and diesel, yet you end up paying more for the latter. Petrol is priced at 66.48 while diesel comes at a cost of 67.34, a difference of 14 paise.
Where diesel, petrol are almost of the same price
In Chhattisgarh, both petrol and diesel prices are almost the same. Petrol costs Rs 75.20 while diesel is Rs 75.28 per litre in Raipur. The difference is also mirrored in the narrow gap between VAT on the two fuels. VAT on petrol is 23.08% while on diesel it is 21.84%.
Where the petrol, diesel price gap is narrow
A price trend analysis of most major cities of India shows that the price gap between petrol and diesel is now turning narrower. In Delhi, diesel is cheaper by Rs 5 only, Mumbai Rs 7, Chennai Rs 4, Bengaluru Rs 5, Kolkata Rs 5 and Hyderabad Rs 3.5.
In Ranchi, the rate gap is just that of Re 1 even as the Jharkhand government taxes petrol (21.52%) more than diesel (19.20%).
Even a year ago in November 2017, the price gap in Delhi was above Rs 11 and around Rs 16 in Mumbai. As prices started gaining gradually, the gap kept on reducing.
Sale of diesel cars decline as diesel prices move up
The direct impact of the price difference between petrol and diesel is felt in the sale of vehicles. As the petrol-diesel price gap equation changes, the sale of diesel cars shows a declining graph in recent times.
According to data from the Society of Indian Automobile Manufacturers (SIAM), the number of diesel cars sold in India has halved during the last five years. In 2013-14, the share of diesel cars was 42% which has now come down to 21% in 2018-19 (till September).