With the Rs 3 increase in drought cess, collected along with VAT from Friday midnight, Mumbaikars now pay the highest price for petrol in the country. Petrol now costs Rs 77.45 per litre in the city, while it's around Rs 77.14 in Nagpur¡ª both higher than in Bhopal, which until Friday had the country's highest rate at Rs 75.85.
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In comparison, it's nearly Rs 10 less in Delhi at Rs 68.26.
Incidentally, the drought cess collected all over Maharashtra has been increased to Rs 9 from Rs 6 at a time when there's no drought in the state, thanks to abundant rainfall last monsoon. Sources say revenue collected may instead help the state government offset loss in income due to shuttering of bars and liquor vends along highways.
The drought cess apart, fuel price variation between different regions is also due to a lack of uniformity in VAT. But the differential is not on an inter-state basis alone. Within Maharashtra, the Mumbai-Thane-Navi Mumbai belt pays a peak VAT rate of 26% while the rest of the state pays around 25%. So other cities in the state have marginally lower prices for petrol.
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A dealer in Mumbai said, "Though prices have been fluctuating, petrol has become costlier by Rs 7-8 per litre in the past one year."
If the state government withdraws the drought cess, petrol price in Maharashtra will be lower than in other states as this cess is not collected anywhere else."
By hiking the cess, the government of Maharashtra has essentially refused to pass on the benefits from the Rs 3.77 cut in petrol price by the Centre on April 1. Consumers in other states continue to enjoy lower rates.
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There are fears now that the prices may further go up if the government meets the demand of petrol pump owners for an increase in dealer commissions.
At least 223 of the 235 petrol pumps in the city have decided to remain closed on Sundays starting May 14 to press for their demands. Dealers said the Rs 3 increase will not in any way benefit them. They are demanding a 75 paise per litre hike in commission. Around 4,700 fuel dealers across the state, barring a few in Pune, have decided to join other seven states ¡ªKarnataka, Andhra, Telangana, Tamil Nadu, Kerala and Pondicherry ¡ªin an agitation demanding margins.
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Another dealer said the prices may rise further when the government implements petroleum minister Dharmendra Pradhan's idea of delivery of fuel at the doorstep. "Any delivery will then add to service charges taking fuel prices further up," a dealer said.