JAIPUR: Sriganganagar has become the first district in the country where diesel crossed the Rs 100-mark after oil marketing companies raised the price of the auto fuel on Saturday.
Diesel price is now retailing at Rs 100.05 a litre in the district after a hike of 25 paise, while petrol is selling at Rs 107.48.
In Jaipur, prices of petrol and diesel increased to Rs 102.73 and Rs 95.92, respectively.
Oil marketing companies did not raise fuel prices for 18 days prior to May 4 because of elections in West Bengal, Kerala, Tamil Nadu, and Assam.
But since May 4, fuel prices have been hiked 23 times, pushing the rates to record highs despite the demand in the country slumping due to lockdowns.
Because of different levels of VAT, other local taxes and transportation costs, fuel prices vary from one state to another.
Since VAT rates in Rajasthan are the highest in the country, auto fuels are costlier than other states.
Rajasthan levies 36% and 26% VAT on petrol and diesel, respectively.
Since the fuel stations in Sriganganagar are supplied from depots in Jaipur and Jodhpur, higher freight costs result in higher prices compared to other places in the state.
But as the district shares its borders with Punjab, where fuel prices are cheaper, people prefer buying from the neighbouring state while Rajasthan loses some of the revenues.
Rajasthan Petroleum Dealers’ Association president Sunit Bagai said, “By having the highest VAT rates on petrol and diesel, Rajasthan loses a lot of business to neighboring states where the prices are lower.” Rajasthan had reduced VAT on petrol and diesel by 2% in February from 38% and 28% to 36% and 26%, which are still the highest in the country.
The state earns nearly Rs 22 from every litre of diesel as VAT and road cess.
Bagai said diesel is a poor man’s fuel.
“The rise in diesel prices will hit the poor more than the rich as everything will become costlier.
Also, since farmers use tractors for cultivation, the input costs for farming will go up further.” Oil companies revise rates of petrol and diesel daily based on the average price of benchmark fuel in the international market in the preceding 15 days and foreign exchange rates.