Buckling under pressure, the central government today cut the excise duty on petrol and diesel by Rs 5 and Rs 10 respectively to bring down retail rates from record highs.
The announcement comes on the eve of Diwali which will help bring down the skyrocketing prices of auto fuel and provide some relief to the common man battling inflation.
“Government of India has taken a significant decision of reducing central excise duty on petrol and diesel by Rs 5 and Rs 10 respectively from tomorrow. Prices of petrol and diesel will thus come down accordingly,” an official statement said.
The Centre has also urged the states to commensurately reduce Value Added Tax (VAT) on petrol and diesel to give relief to consumers.
“The reduction in excise duty on diesel will be double that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season,” the statement said.
In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure.
“The world has also seen shortages and increased prices of all forms of energy. The Government of India has made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet our requirements,” the statement added.
“Driven by the enterprising ability of India’s aspirational population, the Indian economy has witnessed a remarkable turnaround post the Covid-19 induced slowdown. All sectors of the economy – be it manufacturing, services or agriculture – are experiencing significant upward economic activity. To give a further fillip to the economy, the Government of India has decided to significantly reduce the excise duty on diesel and petrol,” it said.
According to the government, the reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes and further spur the overall economic cycle.
While petrol has already hit the Rs 100-a-litre mark or more in all major cities of the country, diesel had touched that level in over one-and-a-half dozen states.
Auto fuel prices in the country differ from state to state depending on the local taxation (VAT) and freight charges. Apart from this, the central government charges an excise duty on auto fuels. (Agencies)