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Daily Trends Now


Jaitley lowers petrol, diesel prices by Rs 2.5 per litre

Jaitley lowers petrol, diesel prices by Rs 2.5 per litre

Immediately after the announcement, and the declaration by the Finance Minister, three states have responded, and reduced the price of petrol and diesel by Rs 2.5, thereby making the overall reduction to Rs 5 per litre.

Jaitley also asked state governments to cut value added tax on fuel by a further 2.50 rupees per litre.

Maharashtra, Gujarat, Uttar Pradesh, Haryana, Assam, Tripura, Madhya Pradesh, Jharkhand, Arunachal Pradesh, Himachal Pradesh, and Chhattisgarh were the 11 to match the Centre's rate cut. He also thanked Prime Minister Narendra Modi and Finance Minister Arun Jaitley for reducing the rates of petrol and diesel, saying this will give a huge relief to the common man. "The state did it before the central government did", he said.

With assembly elections due later this year in Madhya Pradesh, Rajasthan and Chhattisgarh, where the BJP has high stakes, the decision came a day after the Union Cabinet chose to hike minimum support price for Rabi crops. However, India's domestic indicators are quite strong and stable.

In India, nearly half of the price of retail fuel is due to taxes.

For state-owned fuel retailers absorbing Re 1 per litre price would mean about Rs 10,700 crore dent in their revenue on an annualised basis.

The reduction in excise duty, only the second in four years of BJP-led NDA rule, will dent government revenues by Rs 10,500 crore and was aimed at cooling retail prices that had shot up to an all-time high.




The reduction followed petrol and diesel prices touching new highs.

It is only the worldwide factors, primarily rising prices of crude and domestic policy and other measures like the interest rate hike by the USA, which have affected India, Jaitley said adding domestic indicators were strong and stable. Prices have seen a similar hike in other cities as well.

Former finance minister P Chidambaram termed the decision as "tokenism". He also said he would write to all the states to cut their respective taxes.

Oil Marketing Companies (OMCs) have hiked the prices of petrol and diesel by Rs 7.58 per litre and Rs 8.10 per litre since 1 August.

"When the prices go up the Centre receives a fixed amount per litre, whereas the revenue of states go up". Brent, the benchmark for more than half the world's oil, is trading at a four-year high of over Dollars 84 per barrel.

Mr Jaitley expressed hope that the states will reduce state tax on fuel along with centre's move.

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