Government Announces Relief On Fuel Prices By Reducing Excise Duty

Andrew Cummings
October 4, 2018

Concerned over the spike in fuel prices, finance minister Arun Jaitley announced excise duty cut on petrol and diesel by Rs 1.50 per litre adding that Oil Marketing Companies (OMCs) will absorb Re 1 per litre on fuel.

Sources said the Centre has also urged the State governments to slash taxes on petrol and diesel which will is likely to further reduce the prices by at least Rs 5 per litre.

Finance Minister Arun Jaitley said the excise duty cut would have an impact of Rs 10,500 crore on central government's tax revenues. "Last time also only BJP and NDA-led state governments had reduced Value-Added Tax".

The Government will request state governments to cut down, he said. Kerala was one of the first states to cut excise duty.

Jharkhand chief minister Raghubar Das said he was "grateful from the heart" to Jaitley and Prime Minister Narendra Modi for this decision, as it will bring "great relief to the common man". "The cut makes petrol and diesel prices cheaper by Rs 5 in the state". The Centre and oil companies will also take a hit of Rs 1.50 per litre and Re 1 per litre respectively in their revenue. Arun Jaitley said that the interest rates are now at the highest mark in US.

"A large number of worldwide factors, as I have repeatedly said, primarily the rising prices of Brent crude and also the domestic measures taken in the U.S. in terms of policy and raising of interest rates, has a significant impact across the world", Jaitley said. Not giving into the threat of being questioned by the people, the governments of Kerala, Karnataka and Puducherry all made it clear that they will not be following suit and petrol and diesel prices will remain unchanged in the states.

Diesel is being sold at Rs 75.45 per litre in New Delhi, Rs 79.79 per litre in Chennai and Rs 77.30 per litre in Kolkata.

"This is perfectly good economics. we want consumers to spend money on other items do it without impacting the fiscal deficit is surely good economics", he announced after an inter-ministerial discussion with petroleum ministry.

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