Consumers may get relief on fuels

The Centre may cut the excise duty on petrol and diesel by up to Rs 2 and also nudge the states to reduce VAT to check the sky-rocketing prices of the two fuels.

The Union Cabinet is expected to discuss a comprehensive formula for reduction of oil prices on Wednesday, under which the Centre, states and oil companies may be asked to share the burden of increasing oil prices.

Petrol prices rose to Rs 76.87 per litre in Delhi on Tuesday, but in all other metropolitan cities, the rates touched Rs 80 per litre, while in Mumbai it was only 30 paise less than Rs 85.

Similarly, diesel sold at over Rs 68 per litre in Delhi but hovered between Rs 71-73 per litre in other metropolitan cities.

Official sources said the government is planning to give a sustained relief to consumers on the oil front and therefore it is working on a comprehensive formula that may take a little more time.

They said a mere cut in excise duty on the two fuels may reduce the prices for the moment but after a few days, when the crude prices go up further, its impact will be negated.

Addressing the media, BJP president Amit Shah said the government was "serious" about rising oil prices and its impact on the common man, and that a solution could be expected in a couple of days.

He said the government is working on a solution at the highest level.

Top officials of the Prime Minister's Office, finance ministry and petroleum ministry held a number of meetings during the day to hammer out a solution.

Meanwhile, a scheduled meeting between Petroleum Minister Dharmendra Pradhan and oil marketing companies, which was to take place on Tuesday evening, was postponed for Wednesday.

Opposition parties and non-BJP state governments have been putting pressure on the Centre to reduce excise duty before nudging them to bring down VAT.

Kerala Finance Minister Thomas Isaac demanded the excise duty regime of the pre-NDA period to give real relief to people.

The NDA government increased excise duty on petrol and diesel 9 times since it came to power in 2014, but it has reduced the duty only once.