Union Finance Minister of India Arun Jaitley, in a press conference in New Delhi, said that the government of India cut excise duty on petrol and diesel by Rs 2.50, bringing relief to consumers.
Jaitley said the government and oil companies will absorb the price cut by Rs 1.50 and Rs 1 respectively. Jaitley urged state governments to also reduce Value Added Tax (VAT) on fuel by another Rs 2.50.
Commenting on the downfall of the Indian Rupee, Jaitley said that global crude prices touching a four-year high of $86 a barrel and interest rates in the US reaching their highest level in seven years were to blame.
“A large number of international factors, as I have repeatedly said, primarily the rising prices of Brent crude and also the domestic measures taken in the US in terms of policy and raising of interest rates, has a significant impact across the world,” Jaitley said.
The impact was felt both in stock and currency markets, he said.
Inflation in India, however, is still moderate at less than 4 per cent and higher direct tax collections give comfort with regard to fiscal deficit, he said adding domestic macroeconomic indicators are strong and stable, except for current account deficit.
Following the announcement, Maharashtra, Gujarat and Uttar Pradesh governments announced an additional relief of Rs 2.5/litre on petrol and diesel. “Thank you Hon PM @narendramodi ji and Union Minister @arunjaitley ji for reducing ₹2.50/litre on both Diesel and Petrol. This will give huge relief to common citizens,” Maharashtra Chief Minister Devendra Fadnavis tweeted.
— Devendra Fadnavis (@Dev_Fadnavis) October 4, 2018
Earlier, petrol prices touched the Rs. 91 mark in Mumbai, bringing fresh worries for the increasing climb of the price. A litre of petrol in Mumbai now costs Rs 91.08, up from Sunday’s Rs 90.84 a litre. Diesel price has surged to Rs 0.32 in Mumbai and costs Rs 79.72 per litre. Petrol, in Delhi, costs Rs 83.73 a litre and diesel at Rs 75.09/litre.