The Centre on Thursday slashed excise duty on fuel to the tune of Rs 1.50 per litre, thus reducing the overall price of petrol and diesel each by Rs 2.50 per litre.
Speaking at a press conference on Thursday, Finance Minister Arun Jaitley announced 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 1 per litre.
“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,” he added.
The Minister expressed confidence about meeting the fiscal deficit target despite the excise duty cut, saying increased revenue collections would absorb the impact of the cuts. "The government's aim is to give relief to the consumer by increasing their purchasing power without impacting the fiscal deficit," he said. Jaitley said the decision to give relief to consumers was necessitated by the uncertainty regarding the international oil prices and was made possible by better-than-expected revenue collections. "The government's capacity to provide relief is only when domestic factors are strong," he said.
After the minister’s announcement, may states including Jharkhand, Gujarat and Chhattisgarh too announced a reduction in fuel prices.
The state of Karnataka, who earlier slashed fuel prices by Rs 2, will not be announcing any more cuts. According to reports, Karnataka Chief Minister HD Kumaraswamy said that the state government will not reduce prices anymore since it has already announced a rate cut. Kerala Finance Minister Thomas Isaac also announced that the government will not reduce prices at the state level.
The fuel prices across the country have been skyrocketing for a while now.The rate of normal unleaded petrol in Chennai on Thursday stood at Rs 87.33 per litre and that of diesel stood at Rs 79.79 per litre, while in Bengaluru, one litre of petrol cost Rs 84.67 per litre and diesel stood at Rs 75.84 per litre.
While some states like Andhra Pradesh and Karnataka cut the fuel prices weeks ago by announcing a cut to the VAT charged by the states, Tamil Nadu, Telangana and Kerala had maintained that it was up to the Central government to reduce the prices.
With inputs from IANS