Fuel Prices: Center Finally Responds To Common Man’s Plight

Daniel Fowler
October 6, 2018

Excise duty to be reduced by Rs.1.50 & OMCs will absorb 1 rupee.

The shares of Indian oil marketing companies tumbled after Finance Minister announced the decision to cut down the fuel prices to the tune of Rs 2.50 per litre.

Kerala Finance Minister Thomas Isaac on Thursday refused to reduce Value Added Tax (VAT) by Rs 2.50 on petrol and diesel in the southern state as per the Centre's request so as to give relief to the people.

The finance minister asked state governments to match the move with a similar reduction in sales tax or VAT and it will be a test for those states whose leaders were only tweeting and indulging in lip sympathy.

Blaming the Centre for the frequent spurt in price of petroleum products, Isaac said it was the Centre that hiked the taxes on petroleum products. 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. But analysts said the announcement on Thursday shows there is still a heavy government hand in the industry.

The CPI said the price cut was a joke played on the people of India in the festival month.

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The reduction follows petrol and diesel prices soaring to new highs.

But. Overall Price Can Be Reduced By Rs 5 Per Litre.

. The Vasundhara Raje-led Rajasthan government had cut fuel prices by Rs 2.5 on the eve of the "Bharat bandh" called by the Congress and other Opposition parties on September 10.

The Finance Minister said, the prices of crude oil and domestic developments in the USA have impacted the economies across the world. A 13 percent depreciation in the Indian rupee had only made fuel imports costlier.

"Since May 2014, the Modi government has increased central excise duty 12 times".

Jaitley said the impact of the excise duty cut on the Centre's revenues would be about Rs 21,000 crore in a full year and Rs 10,500 crore in the remainder of the current financial year. "First we will see the order, then make a decision on petrol and diesel [prices]", he added.

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