To curb the skyrocketing fuel prices, Finance Minister Arun Jaitley on Thursday announced a cut of Rs 2.5 in the prices of both petrol and diesel. The move comes amid the petrol breaching the psychological mark of Rs 90 in Mumbai and Rs 84 in the national capital.
“Excise duty to be reduced by Rs 1.50 and OMCs will absorb 1 rupee. So, a total of Rs.2.50 will be reduced on both diesel and petrol,” said Finance Minister Arun Jaitley.
Jaitley also said that the Finance Ministry is writing to the state governments to cut Rs 2.50 from the VAT imposed on petrol and diesel prices.
The major announcement comes after Jaitley met Oil Minister Dharmendra Pradhan to look at options to mitigate the impact of hiking fuel prices on the economy.
Petrol prices were Thursday hiked by 15 paise a litre and diesel by 20 paise, according to price notification of state-owned oil firms.
The hike pushed petrol price in Delhi to an all-time high of Rs 84 per litre and diesel to Rs 75.45.
Rates of subsidised domestic cooking gas, too, have breached the Rs 500-mark for the first time.
India is the third largest importer of crude oil and rising international oil prices are inflating domestic transport fuel costs in a strong demand environment. Brent, the benchmark for more than half the world’s oil, is trading at a four-year high of over USD 84 per barrel.
Rupee Thursday dropped to 73.77 against the dollar, resulting in expensive crude imports.
Since mid-August, the petrol price has risen by Rs 6.86 a litre and diesel by Rs 6.73 – the most in any six-week duration after the daily price revision was introduced in mid-June last year.
