Published: Fri, October 05, 2018
Money | By Wilma Wheeler

Petrol, Diesel cheaper by Rs 5 from midnight

Petrol, Diesel cheaper by Rs 5 from midnight

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.

Announcing the decision, Finance Minister Arun Jaitley asked the state governments to match the move with a similar reduction in sales tax or VAT.

Finance Minister Arun Jaitley today announced a Rs 2.50 a litre cut in petrol and diesel prices, factoring in excise duty reduction of Rs 1.50 per litre and asking oil companies to absorb another Re 1.

The announcement was made by Chief Minister Devendra Fadnavis soon after the central government announced cut in the prices of petrol and diesel by Rs 2.50 per litre.

The major announcement comes after Jaitley met Oil Minister Dharmendra Pradhan to look at options to mitigate the impact of hiking fuel prices on the economy. The Centre and oil companies will also take a hit of Rs 1.50 per litre and Re 1 per litre respectively in their revenue.

With this decision, fuel prices in several states like Maharashtra, Gujarat, Chattisgarh, Madhya Pradesh and Uttar Pradesh will come down by Rs 5.

Excise duty to be reduced by Rs.1.50 & OMCs will absorb 1 rupee. Fuel prices are not uniform across the country due to variable state taxes. "Thus petrol and diesel will be Rs 5 cheaper in the state of Gujarat". In Mumbai, petrol rates had breached Rs 90 per litre. In Kolkata and Chennai, petrol prices climbed by 15 paise to Rs 85.80 and Rs 87.33 per litre, respectively.

Global oil prices have risen to four-year highs above $85 a barrel on fears of a global supply crunch, prompting US President Donald Trump to repeatedly demand the Organization of Petroleum Exporting Countries to lower prices.

Rupee Thursday dropped to 73.77 against the dollar, resulting in expensive crude imports. Delhi charges a Value-Added Tax of 27 per cent on petrol and 17.24 per cent on diesel.

"The impact will be about Rs 21,000 crore for the full fiscal".

"I am confident we'll be able to maintain the fiscal deficit even after absorbing this", the minister said. "Inflation is still moderate less than 4 per cent", Jaitley added.

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