Major relief to all; Govt slashes petrol and diesel price by Rs 2.50

NewsBharati    04-Oct-2018
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New Delhi, October 4: The month of October is ought to be a good season of celebration. Giving a major relief to all, the government has slashed petrol and diesel prices by Rs 2.50. Government has decided that revenue department will absorb Rs 1.50 per litre while OMCs will absorb the other Rs 1.00; will request to state governments to reduce VAT on fuel by Rs 2.50 as well.

 

Briefing the media, Finance Minister Arun Jaitely announced marginal relief for citizens from runaway fuel prices with oil duty cut of Rs. 1.50 and another Re 1 drop by oil marketing companies. He blamed rising crude oil prices in the international markets for the rise in fuel prices in India.

Finance Minister Jaitley also appealed to the states to match the centre's effort by reducing value-added tax or VAT by Rs. 2.50 so that the total benefit to citizens is at least Rs. 5. Two BJP-ruled states -- Gujarat and Maharashtra -- immediately responded with fuel price cut.

The Rs. 2.50 benefit for citizens is within the control of the government and oil marketing companies, the finance minister said. "I am sure the states will also start delivering immediately," Mr Jaitley said, amid the opposition's allegations that the economy is under severe stress.

The excise duty cut would dent the government's tax revenue by Rs. 10,500 crore, the finance minister said. Taxes on petrol and diesel, which account for more than a third of retail fuel prices, are one of the biggest sources of income for the government.

Minutes after Jaitley's announcement, the Gujarat government slashed Rs. 2.50 on petrol and diesel.

BJP-ruled Maharashtra also responded to the finance minister's call to lower oil prices.

Arun Jaitley's announcement followed petrol and diesel prices touching a new high. In Delhi, where oil prices are the lowest among big cities, petrol is being sold at Rs. 84 per litre and diesel at Rs. 75.45.

Finance Minister Arun Jaitley said crude oil touched four-year high of $86 a barrel on Wednesday and interest rates in the US have reached a seven-year high.

Following the announcement, the stocks of oil marketing firms such as Hindustan Petroleum, Indian Oil Corporation and Bharat Petroleum fell by over 18% as they would be sharing the burden of the fuel price cut at a time when crude prices are high.