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Goa Cuts Petrol Prices, Will Other States Follow?
Goa chief minister Manohar Parikkar in his budget for 2012-13 has announced a massive cut in petrol prices. He has announced a Rs.11 reduction in petrol prices bringing the price down to Rs.55 per litre. This has been possible be reducing VAT charged on petrol. This will effectively make Goa the state which sell s the cheapest petrol in India.
Mr Manohar Parikkar has also proposed to cut VAT on aviation fuel so that more airlines refuel in the state. The petrol price cut will also attract people from Goa's bordering states such as Karnataka and Maharashtra. The price cut will be effective for five years once the budget is passed.
Mr Parikkar has also reduced the VAT on petrol to 0.1 per cent. State taxes and central taxes make up a large chunk in the price of a litre of fuel. If state governments decide to reduce even a fraction of these taxes on fuel, there will be a massive price cut giving a huge relief to motorists. Many state government that make a hue and cry whenever petrol prices are increased do not bother to reduce taxes.
The effects of inflation has been affecting motorists from every direction. Fuel prices have gone up. Manufacturers have increased prices of their vehicles due to higher taxes and increase in raw material prices. If other state government take the same initiative as Goa vehicles users will definitely be a happy lot.
Even carmakers will benefit from this development as demand for petrol cars will not fall steeply. Carmakers are currently struggling to sell some of their petrol cars due to the high cost of petrol.
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