Embattled govt cuts petrol, diesel prices by ₹2.50 a litre
EXCISE DUTY REDUCED Fuel prices cut by ₹5 in UP, Gujarat, Maharashtra, MP and Uttarakhand after Centre urges states to match move; will dent govt revenue by ₹10,500 crore
The government on Thursday announced a ₹2.50 per litre cut in petrol and diesel prices after it reduced excise duty by ₹1.50 a litre and asked oil companies to absorb another ₹1.
Gujarat, Uttar Pradesh, Madhya Pradesh and Uttarakhand announced similar price cuts for both fuels – effectively reducing fuel by ₹5, while Maharashtra and Jharkhand reduced petrol price by an additional ₹2.50 but left diesel untouched.
The price cut would be effective Thursday midnight.
The reduction in excise duty, only the second in four years of Bharatiya Janata Party (BJP)-led NDA rule, will dent government revenues by ₹10,500 crore and is 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.
The BJP-led government had raised excise duty on petrol by ₹11.77 a litre and that on diesel by ₹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 ₹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 fuel prices are the lowest among all metros and most of the state capitals, petrol is currently sold at ₹84 per litre.
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