Petrol, diesel prices cut before Diwali, government reduced excise duty

The Center has urged states to reduce Value Added Tax (VAT) on both the fuels to provide relief to consumers.

Excise duty on petrol and diesel will be reduced by ₹5 and ₹10 respectively from today, the government announced on the eve of Diwali, aimed at providing relief to people grappling with the impact of rising fuel prices.

In an official statement, the government said the reduction in excise duty on diesel would be twice that of petrol and would give a boost to farmers during the upcoming rabi season.

The Center has urged states to reduce Value Added Tax (VAT) on both the fuels to provide relief to consumers.

Meanwhile, the reduction in excise duty on fuel prices has been announced at a time when petrol and diesel prices crossed the ₹100-mark in all major cities of the country including four metros across the country, hitting an all-time high. are touching.

While petrol prices have crossed Rs 100 in all four metros, diesel prices have also crossed the coveted level in three metro cities as against Rs 98.42 per liter in the national capital.

In fact petrol prices have risen by around Rs 34 per liter in two years and by Rs 26 in one year on sharp rise in global oil prices and taxes. Diesel prices have increased by ₹29.5 per liter in two years and ₹25 in one year.

Also, the relief itself will be marginal, as the excise duty on petrol has been reduced by only ₹5 per litre. If the break-up of the price of petrol in New Delhi is taken as an example, the component of excise duty is ₹ 32.90 per liter out of the total cost of ₹ 109.69 (at which it was being sold two days back).

So if excise duty is cut by Rs 5, the price of petrol in the national capital will come down to only Rs 105.69 per liter, which is still high and is over Rs 100.

On Wednesday, the price of petrol in Delhi was Rs 110.04 per liter while diesel was being sold for Rs 98.42. The price of petrol in Mumbai was ₹ 115.85 while that of diesel was ₹ 106.62 per litre.

Excise duty on petrol was raised from ₹19.98 per liter to ₹32.9 last year to take the gains arising out of international oil prices to a multi-year low as pandemic demand. was for

The decision is being seen as Diwali for the burdened consumers, though earlier this week oil marketing companies had increased the prices of LPG cylinders by Rs 266, adding to the burden of the common man.

Meanwhile, the government further said that reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, helping the poor and middle class.

“Today’s decision is expected to give further impetus to the overall economic cycle,” the official statement said.

In recent months, there has been a global jump in crude oil prices. As a result, there was an increase in the domestic prices of petrol and diesel.

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