Petrol, Diesel Is Now Cheaper By Rs 5/Litre! Find Out How?

Sources said Modi gave his nod on Thursday morning after which Jaitley made the announcement that the Centre would cut excise duty by Rs 1.5 per litre of petrol and diesel, each, while oil marketing companies would reduce the prices by a rupee per litre.

The state governments in nearly all BJP-ruled states including Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh, Jharkhand, Assam, Haryana, Himachal Pradesh, Uttar Pradesh, and Tripura today reduced the prices of petrol and diesel by Rs 2.5 soon after the Finance Minister Arun Jaitley announced a similar cut in fuel prices. "The government's capacity to provide relief is only when domestic factors are strong", he said.

The reduction follows petrol and diesel prices soaring to new highs.

"Ever since the Modi government assumed office, it has raised excise duty on diesel by Rs 14 and petrol by Rs 9 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. Congress spokesperson Randeep Surjewala termed the cut in prices as a "pittance of one or two rupees", claiming that BJP-ruled states Maharashtra, Chhattisgarh, Jharkhand and Rajasthan levy the highest Value-Added Tax on petroleum products.

Maharashtra and Gujarat were among the first to announce matching fuel price cuts providing an effective Rs 5 relief to consumers. The total price cut in these states is now Rs 5 per litre.

Since the government came to power in May 2014, it has used tax increases on petrol and diesel prices to raise funds for welfare programmes. "This time if other state governments do not do it then people will ask them", he said.

Justifying the minimal relief in fuel prices, Jaitley said "We have to react to the situation and give relief without impacting the fiscal deficit". In a tweet he said, "Madhya Pradesh has also reduced VAT [Value Added Tax] on fuel as a result of which the people will get a relief of Rs 5".

After Centre's announcement, the Congress dared Prime Minister Narendra Modi to bring the fuel prices back to the 2014 level instead of throwing a "pittance of one or two rupees" at the public.

Thank you Hon PM @narendramodi ji and Union Minister @arunjaitley ji for reducing ₹2.50/litre on both Diesel and Petrol.

Maharashtra charges the highest sales tax and VAT on petrol at 39.12 per cent.

West Bengal Chief Minister Mamata Banerjee also hit out at the Centre for asking the states to reduce taxes and demanded a rollback of the Rs 10 cess it levied on fuel. Banerjee claimed that fuel prices were reduced in the worldwide market and asked why these were increasing in the country.

  • David Armstrong