Under pressure from public criticism, the Centre’s Narendra Modi government has cut excise duty on petrol and diesel by Rs 2 per litre ahead of crucial Gujarat assembly elections.
“Govt of India has reduced Basic Excise Duty rate on petrol and diesel [both branded and unbranded] by Rs 2 per litre w.e.f. 4th October,2017,” the finance ministry said in a tweet.
Govt reduces basic excise duty rate by rs2 per litre on petrol & diesel (both branded&unbranded) wef 4.10.17
— Ministry of Finance (@FinMinIndia) October 3, 2017
Its statement said, “The Government of India has decided to reduce the Basic Excise Duty rate on Petrol and Diesel (both branded and unbranded) by Rs 2 per litre with effect from 4th October, 2017. This decision has been taken by the Government in order to cushion the impact of rising international prices of crude petroleum oil and petrol and diesel on Retail Sale Prices of Petrol and Diesel as well as to protect the interest of common man.”
Prices of petrol and diesel will be reduced by the amount of duty cut with effect from tomorrow.
Petrol currently costs Rs 70.88 per litre in Delhi while a litre of diesel is priced at Rs 59.14, the highest ever.
On petrol, the government currently levies excise duties totalling Rs 21.48 per litre while that on diesel is Rs 17.33 per litre.
The government, which had raised duties three years back to take away gains arising from plummeting global oil prices, has been criticised for not cutting excise duty despite a sustained rise in fuel prices since early July.
Petrol price has jumped by Rs 7.8 per litre since July 4, while diesel rates have touched an all-time high after rates went up by Rs 5.7.
“This (excise duty cut) has been done to cushion the impact of rising international prices of crude petroleum oil and petrol and diesel on their retail sale prices,” it said in another tweet.
The duty reduction will lead to a Rs 13,000 crore loss of revenue to the government during the remaining period of the fiscal.
Opposition leaders particularly from Congress party were quick to dismiss the move by calling it a public spectacle. Former Rajasthan chief minister and the party’s in-charge of Gujarat, Ashok Gehlot called the move a ‘tamasha.’
He said, NDA government’s decision to cut Rs 2 on petrol/diesel excise duty is nothing short of a tamasha…it is just a pretence…”
NDA government's decision to cut Rs 2 on petrol/diesel excise duty is nothing short of a tamasha…it is just a pretence…
— Ashok Gehlot (@ashokgehlot51) October 4, 2017
Congress’s state president in Gujarat, Bharat Singh Solanki, said, “Govt is trying to fool people by slashing excise duty ₹2 on Diesel &Petrol, while it has hiked excise duty by more than 380% in just 3 yrs!”
His colleague, Arjun Modhwadia, agreed when he said, “Excise on petrol has been increased to ₹22 from Just ₹9.48 in 2014, People will give befitting reply to Govt for such unprecedented hikes.”
Many view the latest government’s move to slash excise duty on petrol and diesel as a poll gimmick as the BJP faces its toughest battle yet in Gujarat, where it has been in government for 22 years.
The Modi government has been facing public condemnation for repeatedly hiking the prices of petrol and diesel even when the international price for crude oil has been at an all time low.