Motorists in Calcutta now pay the least among the four metro cities for petrol in the country.

Delhi has traditionally been the city where it is most affordable to use personal vehicles and two-wheelers. However, after a Rs 0.34 a litre rise in prices on Tuesday, petrol now costs Rs 98.64 a litre in Calcutta, while it costs Rs 98.81 a litre in Delhi. A litre of the fuel now retails at Rs 104.9 in Mumbai and Rs 99.80 in Chennai.

Oil industry veterans expect Chennai to become the second metro after Mumbai to hit the Rs 100-a-litre mark, followed by Delhi and Calcutta.

“Unless the taxes are cut either by the state or the Centre or international prices cool off, petrol prices should cross Rs 100 a litre in all four metros in the first week of July,” an oil industry expert said.

A number of tax tweaks in Delhi and Bengal over the last 15 months changed the historical price trend.

In May 2020, the Arvind Kejriwal government in Delhi had hiked the value added tax (VAT) on both petrol and diesel to shore up revenue amid the nationwide lockdown, which completely halted economic activity and dried up tax collection.

After the restrictions were eased, the government rolled back VAT on diesel from 30 per cent to 16.75 per cent but the same was not done for petrol. It continues to attract a 30 per cent VAT, up from 27 per cent previously.

In contrast, Bengal not only maintained the VAT on petrol and diesel, it actually cut prices by Re 1 on February 22 ahead of the Assembly elections in the state. As a result, the traditional gap between Delhi and Calcutta had narrowed and the latter overtook eventually. Bengal collects Re 1 a litre as cess from petrol as well as diesel.

The price of diesel, however, continues to be the cheapest in Delhi among the four metros, followed by Calcutta. After a Rs 0.28 a litre hike overnight, diesel prices in Calcutta now stand at Rs 92.03 compared with Rs 89.18 a litre in Delhi and Rs 96.72 and Rs 93.72 a litre in Mumbai and Chennai, respectively.

Bengal imposes a 25 per cent and a 17 per cent VAT on petrol and diesel, respectively.