JOIN USPetrol, diesel rates cut by Rs 2.50 per litre
The Centre on Thursday announced a reduction of Rs 2.50 a litre each in the prices of petrol and diesel, which have risen by Rs 5.17 and Rs 4.84 a litre respectively in Delhi alone since September 1.
The Opposition was quick to react saying the government has merely indulged in “tokenism”.
Petrol prices have risen by Rs 13.88 per litre in the past nine months of this year and diesel by Rs 15.55 a litre in Delhi, where the prices of the two fuels are cheapest among metros.
Finance Minister Arun Jaitley said the Centre and the oil marketing companies together would absorb Rs 2.50 per litre on petrol and diesel. He also asked the state governments to match the move with a similar reduction. The Centre, he said, would give relief of Rs 1.50 through a cut in excise duty and the OMCs will bear the burden of Re 1 a litre.
The price revision on the two fuels will be effective from midnight of Thursday-Friday.
Congress, however, said it was a late realisation by the government and that the people could not bear the burden.
“An oil revenue-dependent government has belatedly realised the unbearable burden on the people and indulged in tokenism,” Chidambaram said in a tweet.
Most of the BJP-ruled states, including Prime Minister Narendra Modi’s home state Gujarat and Maharashtra, where the local taxes on the two fuels are the highest, followed the move to match the cut immediately but Uttarakhand said it would not reduce VAT now. Others are expected to follow.
This is only the second time that the Centre has reduced excise duty on the two fuels. The last one was in October last year. But it has raised duty nine times between November 2014 and January 2016, pushing the prices by Rs 11.77 a litre on petrol and Rs 13.47 a litre on diesel.
The move will cost the exchequer Rs 10,500 crore in the remaining six months of the fiscal as crude prices have topped $86 per barrel, their four-year high.
But there will be a marked reduction in inflation by about 16 basis points, according to estimates by India Rating and Research, a Fitch group company.