mumbai

Updated: May 18, 2017 09:29 IST

The cash-strapped Maharashtra government has levied Rs2 as additional surcharge for a litre of petrol within just four weeks of its last hike last month. On Tuesday, the Centre announced a reduction in the price of petrol by Rs2.16 a litre . Petrol will now cost Rs76.91 in Mumbai.

The notification issued by the government has taken the surcharge to Rs11 a litre, besides the value added tax of 26% in Mumbai, Thane and Navi Mumbai and 25% in rest of the state. The decision will result in petrol being the costliest in the country. The government is expected to earn an additional revenue of Rs700 crore a year from the hike. The surcharge on diesel remains unchanged.

Sources said the government resorted to hike in surcharge on the petrol in the wake of the dwindled revenue from the traditional sources of excise duty on liquor and stamp duty on the housing transactions.

To avoid loss of the sales to the neighbouring states, the government has not touched the existing VAT of Rs 24 + Rs 2 surcharge in Mumbai and Rs 21 + Rs 2 surcharge in the rest of Maharashtra on diesel. “It is a bad news for the consumers as the rates have gone up too much. By not making any hike on the surcharge on the diesel, the government has taken a wise decision as it would have led to the loss of business and rise in the inflation,” said Uday Lodh, general secretary, Fampeda.

In October 2015, the government had levied surcharge of Rs 2 on petrol and diesel and increased VAT on liquor, aerated drinks to cover the loss of revenue due to the fall in the international prices of the crude oil.

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Fuel prices cut: Petrol cheaper by Rs 2.16 per litre, diesel by Rs 2.10