Published: Sun, October 07, 2018
Markets | By Erika Turner

Central government cuts fuel prices by Rs 2.50 a litre in India

Central government cuts fuel prices by Rs 2.50 a litre in India

Mumbai, for instance, saw the price of petrol cross the Rs 90/litre barrier while the cost of diesel had also breached the Rs 80/litre mark. He said that Rs 10,500 crore will be the impact of the excise duty cut this year.

Union Finance Minister Arun Jaitley spoke on the second day of the Hindustan Times Leadership Summit 2018.

The central government on Thursday gave relief to masses from skyrocketing fuel prices and cut petrol and diesel rates by Rs 2.50 a litre with effect from midnight.

While the recent tax cut by the government resulting in the lower fuel price is great news for consumers, global oil prices are still a big determinant on how petrol and diesel are ultimately priced in India. Other BJP-ruled states are expected to follow suit. He said states collect extra taxes when oil prices go up since their taxes are ad valorem.

BJP chief Amit Shah was closeted with three senior ministers on Wednesday and discussed the need for cutting fuel prices, sources said. Its price will be down by Rs 1.28 per litre and in total by Rs 3.78 per litre.

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Madhya Pradesh government has also made a decision to give an additional relief of ₹2.5/litre on Petrol and Diesel to give total benefit of ₹5/litre in the state, tweeted Madhya Pradesh CM Shivraj Singh Chouhan. If the Centre is serious, it should reduce the tax to what it was when it assumed office.

A day after slashing Value-Added Tax on petrol in Maharashtra, Chief Minister Devendra Fadnavis said here on Friday that even diesel prices will be reduced by around Rs 4/litre.

The Economic Survey had identified rising oil prices as one of the biggest risks to the Indian economy stating that it would crimp real incomes and spending. However, in Mumbai, the diesel have gone up by 7 paise only. After much chaos regarding the fuel rate, the government has chose to cut down the price of the fuel. Jaitley expressed confidence in maintaining the fiscal deficit target for the current financial year despite the reductions.

On OMCs absorbing Re 1, he said they would adjust it over present and future prices.

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