Jalandhar: The Union government announced five rupees hike in petrol prices on Saturday. The hike will be financially detrimental for people in Punjab as they will have to burn a bigger hole in their pockets for petrol.

As Value Added Tax (VAT) and other levies on petrol are higher in Punjab as compared to neighbouring Chandigarh, Haryana, Himachal Pradesh, Rajasthan and Jammu and Kashmir, petrol is going to cost Rs 70 per litre in Punjab.

In the biggest ever price increase of the fuel, state-owned oil companies on Saturday hiked petrol price by Rs 5 per litre with effect from midnight on Sunday.


In the last two years, the cumulative hike in the petrol prices has been Rs 25 per litre, thus increasing the financial burden on the masses.

The petrol rates in 2009 in Punjab were Rs 44.74 per litre which increased to Rs 70 per litre in 2011. This way, if a vehicle consumes one litre of petrol daily, the individual will have an additional expense of Rs 700.

With 31.5 per cent VAT and other taxes on Petrol in Punjab, the state government earns revenue of Rs 7.50 on every one litre of petrol.

Jalandhar depots of IOC apart from BPC and HPC supply petrol to six cities including Jalanadhar, Amritsar, Navashahar, Pathankot, Gurdaspur and Kapurthala. These cities get over 6 thousand kilo litre of petrol (6 lakh litre) on average.

The petrol hike that led to hike of Rs 20 per litre over the last two years, added a burden of Rs 12 crore on masses while the state government earned revenue of Rs 4 crore. This included 31.5 per cent VAT, education tax and road tax.

With the current price of petrol, which is Rs 65 per litre, the state government’s income earning from the six districts is Rs 13 crore.

The office bearers of Petroleum Dealer Association, Vicky Sehgal and Manoj Sarin said, “Owing to high VAT rate, the revenue earning of Punjab government is also high. In this condition, if VAT rates get rationalized, though the earnings of the government would not be affected much, it will give some relief to the common man.”