India Introduces Fuel Relief On Rising Prices At The Pump

Sean Reid
October 7, 2018

West Bengal Chief Minister Mamata Banerjee and Delhi Chief Minister Arvind Kejriwal demanded that the Centre cut excise duty by Rs 10 per litre on petrol and diesel.

With a similar increase, petrol is now priced at Rs 83.52 and Rs 84.89 per litre in Kolkata and Chennai, respectively.

Since April this year, prices of petrol and diesel has witnessed a steep upswing, baffling consumers all over the country. Following Centre's move, Maharashtra government has also announced a Rs 2.5 reduction on the petrol.

► Maharashtra CM Devendra Fadnavis said: "Maharashtra government also chose to give additional relief of Rs 2.50 per litre on petrol to give a total benefit of Rs 5 per litre in the state of Maharashtra".

Chhattisgarh, Assam and Tripura also reduced the fuel prices by Rs 2.50 per litre, while Andhra Pradesh and flood-hit Kerala refused the centre's request.

The price cut reduced the government's excise duty by 1.50 per litre and cut one rupee per litre on the amount charged by state-run oil marketing firms Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp.

On May 26, 2014, the price of crude oil (Indian Basket) was $108.05 per barrel in the global market.

The consumers will get a benefit of Rs. 2.50, said finance minister Arun Jaitley while announcing the decision.

The state of Karnataka, who earlier slashed fuel prices by Rs 2, will not be announcing any more cuts.

Additionally, the union minister was generous enough to urge the state governments to follow the Center's footsteps and cut down the rates of petrol and diesel.

Gujarat CM Vijay Rupani said: "Finance Minister Sh @arunjaitley Ji has announced Rs.2.5 cuts in petrol & diesel prices, reciprocating positively to FM's announcement, the Govt Of Gujarat has also made a decision to reduce Rs.2.50 on both petrol & diesel". After much chaos regarding the fuel rate, the government has chose to cut down the price of the fuel. At the same time, the prices of crude oil in the worldwide market was $108 per barrel but the prices of the crude oil dropped to $77 per barrel at the start of November and further reduced to $36 in March, 2016. According to an official release, Value-Added Tax on petrol in state has been reduced from 26 per cent to 22.20 per cent, whereas it will be 15 per cent on diesel as against the earlier rate of 19 per cent.

By lowering duties, the Narendra Modi government is borrowing a page from the rulebook of past governments that have lowered levies whenever global oil prices shot up.

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