Published: Fri, October 05, 2018
Business | By Eloise Houston

Government Announces Relief On Fuel Prices By Reducing Excise Duty

Government Announces Relief On Fuel Prices By Reducing Excise Duty

Additionally, the union minister was generous enough to urge the state governments to follow the Center's footsteps and cut down the rates of petrol and diesel. Chief minister Raman Singh announced the decision to reduce Value-Added Tax so that the total benefit of Rs five could be passed on to the citizens.

Announcing the much sought-after relief, Finance Minister Arun Jaitley told a press conference that the cut will be effected through slashing of excise duty to the tune of Rs.1.50 per litre while the oil marketing companies (OMCs) will absorb the impact to the tune of Re one.

In another tweet, Fadnavis announced that the state government will heed the government's request and cut the price of petrol by Rs 2.5 per litre, bringing the total benefit for end consumers to Rs 5 per litre in the state. After steadily raising taxes on fuel between 2014 and 2016, the Centre now levies an excise duty of Rs 19.48 per litre on petrol and Rs 15.33 on diesel.

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

"The states' revenue increases because of increased crude oil prices and hence it is easier for the states to absorb Rs 2.50", he said.

With this decision, fuel prices in several states like Maharashtra, Gujarat, Chattisgarh, Madhya Pradesh and Uttar Pradesh will come down by Rs 5.

According to the Finance Minister, the move will have an impact of Rs 10,500 crore this fiscal but the government is confident of achieving the fiscal deficit target.

Transport fuel prices have continued on a daily record-breaking upward movement with petrol inching closer to Rs 84 in Delhi and having already crossed the Rs 91 a litre mark in Mumbai.

Petrol prices were Thursday hiked by 15 paise a litre and diesel by 20 paise, according to price notification of state-owned oil firms. If the Centre is serious, it should reduce the tax to what it was when it assumed office.

"We are writing to the state governments that as the central government is cutting Rs 2.50 on both petrol and diesel, they do the same", Jaitley added. Also, the rupee dropped to its lowest ever level of 73.77 against the dollar, resulting in expensive crude imports.

"Since May 2014, Modi Government has fleeced and duped the common people by draconian taxation of Rs 13 lakh crore. We are committed to 3.3 per cent figure, we will maintain that", he said.

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