In what could be termed as a major relief from the burgeoning fuel price in India, the Union Government has announced the excise duty cut on petrol and diesel by Rs.2.50. Union Finance Minister, Arun Jaitley, while addressing the media at North Block in New Delhi, announced the price cut today, according to a IE report.
While speaking to the media after attending an inter-ministerial meeting, chaired by the Prime Minister, Narendra Modi in New Delhi this morning, the Minister said that it was agreed upon between the government and the oil marketers to absorb the price revision by Rs.1.50 and Rs.1 respectively. Jaitley further appealed the state governments to reduce the value added tax on fuel by another Rs.2.50.
On the backdrop of bullish stock markets and weakening of Rupee, the Minister cited the rising cost of Brent crude prices as the reason for the rise in petrol price in India. The crude prices almost breached a four-year high of $86 per barrel and interest rates in the US sailing their highest level in seven years. “A large number of international factors, as I have repeatedly said, primarily the rising prices of Brent crude and also the domestic measures taken in the US in terms of policy and raising of interest rates, has a significant impact across the world,” Jaitley said.
The impact was felt both in stock and currency markets, he said. Inflation in India, however, is still moderate at less than 4 per cent and higher direct tax collections give comfort with regard to fiscal deficit, he said adding domestic macroeconomic indicators are strong and stable, except for current account deficit.
Immediately following Jaitley’s announcement, Maharashtra, Gujarat and Uttar Pradesh governments announced an additional relief of Rs 2.5/litre on petrol and diesel. “Thank you Hon PM @narendramodi ji and Union Minister @arunjaitley ji for reducing ₹2.50/litre on both Diesel and Petrol. This will give huge relief to common citizens,” Maharashtra Chief Minister Devendra Fadnavis tweeted. In Delhi, where the fuel prices are the lowest among all metros and most state capital, petrol is sold at Rs 84 per litre and diesel at Rs 75.45, added the report.