Major relief for common man as fuel prices come down by Rs 2.50 a litre

The government Thursday announced a Rs 2.50 per litre cut in petrol and diesel prices after it reduced excise duty by Rs 1.50 a litre and asked oil companies to absorb another Re 1.

Price cut in states like Gujarat and Maharashtra would be Rs 5 after they matched the announcement with a similar reduction in local sales tax or VAT rates.

The price cut would be effective from midnight tonight.

The reduction in excise duty, only the second in four years of BJP-led NDA rule, will dent government revenues by Rs 10,500 crore and was aimed at cooling retail prices that had shot up to an all-time high.

Announcing the decision, Finance Minister Arun Jaitley asked the state governments to match the move with a similar reduction in sales tax or VAT.

The BJP-government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by Rs 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.

It had resisted the call for a reduction in excise duty since May when retail rates first shot up and then again from mid-August when fuel prices started moving up.

In Delhi, where the fuel prices are the lowest among all metros and most of the state capitals, petrol is currently sold at Rs 84 per litre and diesel at Rs 75.45.

ALSO READ: Maharashtra swift to heed Centre's call, cuts fuel prices by Rs 2.50/litre

Jaitley said he on Wednesday met Oil Minister Dharmendra Pradhan and inter-ministerial consultations continued on Thursday. Read Complete Article