Fuel price hike aimed to boost public transport:Nirmala

Fuel price hike aimed to boost public transport:Nirmala

Nirmala Sitharaman (PTI File Photo)

As petrol and diesel price hike became effective Saturday onwards, leading to protests in some pockets, Finance Minister Nirmala Sitharaman said that the move to raise prices of transport fuel was aimed at inculcating a habit in people to use public transport.

“If I am investing in better metros, better transport and also in the future of public transport, I would expect there would be a behavioural shift towards more public transport usage rather than insisting on having your own car and a single passenger ride in it,” Sitharaman said in her interaction with a group of media persons, a day after she presented the Union Budget for 2019-20.

The Budget proposed to increase additional excise duty on each fuel by Re 1 and a road and infrastructure cess of an equal amount. The move raised the price of petrol by Rs 2.50 per litre after adding the local taxes and state VAT. It increased the price of diesel by Rs 2.30 per litre.

The additional duty and cess are expected to raise an additional Rs 28,000 crore to the exchequer.

"Crude prices have softened from their highs. This gives me room to review excise duty and cess on petrol and diesel. I propose to increase special additional excise duty and road and infrastructure cess each one by 1 rupee a litre on petrol and diesel," Sitharaman had said while announcing additional duty and cess on petrol and diesel.

The finance minister, however, dismissed suggestions that levies on the transport fuels would fuel inflation.

She said that the step was also aimed at moving people away from fossil fuels to electric vehicles.