Government has announced a relief of Rs. 2.50 on fuel prices to consumers. Announcing the decision, Finance Minister Arun Jaitley said that the Centre will cut Rs 1.50 in excise duty on fuel while an additional Re 1 will be absorbed by the Oil Marketing Companies.
He has also urged the State governments to cut the VAT on fuel by an equal amount. Jaitley said that the move will have an impact of Rs. 10,500 crore this fiscal but the government is confident of achieving the fiscal deficit target. The Central government charges Rs. 19.48 excise duty on a litre of petrol and Rs. 15.33 on diesel.
The Assam government has also announced their decision to reduce fuel price by Rs. 2.50, after Finance Minister asked the States to cut the VAT on fuel.
In order to ease burden on common people & in tandem with the announcement of FM Shri @arunjaitley ji to cut prices of petrol & diesel by Rs 2.50, Govt of Assam has decided to reduce tax on petrol & diesel prices by Rs 2.50 thereby making them cheaper by Rs 5 in Assam.
— Sarbananda Sonowal (@sarbanandsonwal) October 4, 2018
The tax cut of ₹2.50 per litre on both petrol & diesel shall mean a loss of revenue of ₹400 cr.
— Himanta Biswa Sarma (@himantabiswa) October 4, 2018
#BREAKING | #Petrol & #diesel prices to come down by Rs 5/litre in #Assam as well. After Central Govt slashes rates by Rs 2.5/litre, #Assam Govt also announces a cut of Rs 2.5/litre. #Petrol price in #Assam to come down to Rs 81.5/litre, #diesel price to be Rs 73.91 a litre. pic.twitter.com/wZwpsMKmA4
— NEWS LIVE (@NewsLiveGhy) October 4, 2018
Minutes after Jaitley’s announcement, the Gujarat government also slashed Rs. 2.50 on petrol and diesel.
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 decided to reduce Rs.2.50 on both petrol & diesel. Thus petrol & diesel wd be Rs. 5 cheaper in the State of Gujarat
— Vijay Rupani (@vijayrupanibjp) October 4, 2018
BJP-ruled Maharashtra also responded to the finance minister’s call to lower oil prices.
Maharashtra Government also decided to give additional relief of ₹2.5/litre on Petrol to give total benefit of ₹5/litre in the State of Maharashtra.
— Devendra Fadnavis (@Dev_Fadnavis) October 4, 2018
The finance minister added that the Central Government will not go back on deregulation of fuel prices. “We have to react to the situation and give relief without impacting fiscal deficit. We cannot do it at the cost of fiscal position and give it when it can absorb it,” he said.
Arun Jaitley’s announcement followed petrol and diesel prices touching a new high. Jaitley said crude oil touched four-year high of $86 a barrel on Wednesday and interest rates in the US have reached a seven-year high.