Under attack for the spike in petrol and diesel prices, the Finance Ministry finally relented and reduced the Basic Excise Duty on these fuels by ₹ 2 a litre effective October 4.
After the cut, the retail price petrol in Delhi is expected to be near to ₹ 68 a litre while the price of diesel will be near ₹ 57 a litre.
In a statement, the Finance Ministry said the government has decided to reduce the Basic Excise Duty rate on petrol and diesel (both branded and unbranded) by ₹ 2 per litre with effect from October 4. It remains to be seen whether the States will follow suit and bring down the Value Added Tax rates levied by them on these two products.
The Finance Ministry was also quick to point out the revenue loss the Centre will incur on account of these reductions in excise duty. The revenue loss will be about ₹ 26,000 crore in a full year, and about ₹ 13,000 crore during the remaining part of the current financial year.
It went on to say that this decision has been taken by the government in order to cushion the impact of high prices on common man.
Earlier due to the increase in the international prices of Petrol and Diesel, during the last few weeks, the retail prices of petrol and diesel at Delhi have risen to ₹ 70.83 a litre and ₹ 59.07 a litre respectively, as on October 2. This rise in the prices is also reflected in WPI inflation, which has increased to 3.24 per cent for August against 1.88 per cent of July.
Before the revision, the excise duty on Petrol stood at ₹ 21.48 a litre while the duty on diesel was ₹ 17.33 a litre. Read more
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