Government Announces Relief On Fuel Prices By Reducing Excise Duty

FM Arun Jaitley addressing a press conference at North Block in New Delhi

FM Arun Jaitley addressing a press conference at North Block in New Delhi

It is to be noted that the Maharashtra government has reduced the price of petrol only and not diesel.

Petrol prices in Delhi went up by 18 paise today to end up at Rs 81.68 per litre and diesel prices rose to Rs 73.24 per litre after an increase of 29 paise. "After the implementation of revision of fuel prices on a daily basis in the a year ago, this is the highest tax cut on petrol and diesel", he said. Petrol and diesel prices on Saturday were also hiked by 20 paise and 30 paise, respectively.

Recently, the BJP government announced a Rs 2.50 per litre reduction in prices of petrol and diesel. In Kolkata and Chennai, petrol prices climbed by 15 paise to Rs 85.80 and Rs 87.33 per litre, respectively. Several states, including Gujarat, Assam, Uttar Pradesh, Chattisgarh, Jammu and Kashmir, and other slashed prices by as much as Rs 2.5 on the same day, expanding the effective relief to customers to Rs 5. Fuel prices are revised by oil marketing companies on daily basis.

Finance Minister Arun Jaitley, who made the announcement, pegged the excise duty cut impact at Rs 10,500 crore.

Addressing mediapersons in New Delhi, Congress spokesman Randeep Singh Surjewala called the cut "a panic reaction in the face of public anger" ahead of assembly polls in four states.

He also asked state governments to follow suit and cut taxes by a similar amount.

Gujarat CM Vijay Rupani said: "Finance Minister Sh @arunjaitley Ji has announced Rs.2.5 cuts in petrol & diesel prices, reciprocating positively to FM's announcement, the Govt Of Gujarat has also chose to reduce Rs.2.50 on both petrol & diesel".

After Thursday's decision, ratings agency ICRA said in a report that oil marketing firms were likely to lose 72 billion rupees ($976 million) on fuel sales this fiscal year.

Nayara, Reliance and smaller private rival Shell together own around 6,000 fuel retail outlets, compared to the 55,000 outlets operated by state firms.

"And reducing oil prices, if you say is good politics, so be it", said Mr Jaitley. Why the state government is not reducing its Value-Added Tax?

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