Deputy chief minister Nitin Patel on Monday said that petrol prices in the state will be increased by Rs2 per litre. A similar hike will also be made for diesel. The price rise will be in effect from midnight today.
Patel in a press meet said that despite the hike, Gujarat will be among the states which will have the lowest petrol and diesel prices in the country. He said petrol prices in the state were lower by Rs10 to Rs12 compared to other states while Gujarat ranked 16 in diesel prices in the country. The hike is likely to earn the state exchequer Rs1500 crore to Rs1800 crore in additional revenue.
Patel said that earlier the state government had twice reduced the price of petrol and diesel by 7% and so the effective hike at present is only 3%. He said the hike has been warranted as there has been a drop in revenue due to the COVID-19 induced lockdown and slump in economy.
He said despite the lack of revenue the state government had paid salaries of its employees, announced schemes for the people and even continued to support municipal corporations. He added that even as the revenues streams declined the cost was on the rise due to COVID-19 and providing meals for patients, sanitisation all were added cost for the government.
He said the salary and pension of the employees alone came to Rs4,600 crore and that the state was yet to get its share of GST from the Centre. He also added that Rs23,230 crore was the estimated VAT revenue for the state but this is likely to fall short of Rs8,500 crore due to the lockdown.