Under pressure to check the rapidly rising prices of fuel, the Centre’s Narendra Modi government on Thursday announced a Rs 2.50 a litre cut in petrol and diesel prices. Union Finance Minister Arun Jaitley said that this also included the excise duty reduction of Rs 1.50 per litre as he asked oil companies to absorb the remaining Rs 1.
Jaitley said that the excise duty cut would have an impact of Rs 10,500 crore on central government’s tax revenues, reported PTI.
He also asked state governments to follow suit by cutting a sales tax or VAT by a similar amount. This means that the onus would largely be on Jaitley’s party, the BJP as it’s part of governments in at least 20 states across India. Of them BJP-ruled Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Chhattisgarh, Assam, Uttarakhand, Himachal Pradesh and Tripura announced price cuts for diesel and petrol. Jharkhand has reduced price of diesel.
The Congress called the announcement by the Centre as ‘band-aid’ treatment.
Rising fuel prices had become a source of considerable embarrassment for the BJP in the election year. The party that came to power in 2014 promising reduction in the prices of petrol and diesel has failed to deliver its election promises.
Among metros, the price of petrol per litre was the most expensive as it crossed Rs 90 barrier long ago. In Delhi, where the fuel prices are the lowest among all metros and most state capital, petrol is sold at Rs 84 per litre and diesel at Rs 75.45.
In small cities such as Bihar’s Muzaffarpur, the price of one litre of petrol had breached Rs 92 mark.
Experts believe that the Modi government ought to have passed on the benefits to consumers when the oil prices in the international market had come down to a historic low soon after the BJP won a historic mandate in May 2014.