NEW DELHI, Nov 3: In a Diwali gift, the centre has decided to reduce the excise duty on petrol and diesel by Rs five and Rs 10 respectively providing that much relief to the consumers suffering under almost daily hike in fuel prices.
The duty cut will come into effect from the Diwali day on Thursday. The reduction in excise duty on diesel will be double that of petrol and will come as a boost to the farmers during the upcoming Rabi season, the government said in an official statement.
States have been urged by the Centre to reduce value added tax (VAT) on both the fuels to give relief to consumers. However the reduction has been announced at a time when petrol and diesel prices have been touching all time highs across the country. The relief to the consumers will only be marginal.
On Wednesday, petrol price in Delhi stood at ₹ 110.04 per litre while diesel was being sold for ₹ 98.42. In Mumbai, petrol price was ₹ 115.85 while diesel stood at ₹ 106.62 per litre.
Excise duty on petrol was hiked from ₹ 19.98 per litre to ₹ 32.9 last year to recoup gain arising from international oil prices plunging to multi-year low as pandemic gulped demand. The decision is being seen as a Diwali sop to the burdened consumers, though earlier this week, prices of LPG cylinders had been hiked by oil marketing companies by ₹ 266, adding to the burden of the common man.
The government, however, claimed that reduction in excise duty on petrol and diesel would also boost consumption and keep inflation low, thus helping the poor and middle classes. “Today’s decision is expected to further spur the overall economic cycle,” the official statement said. In the recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure, official sources admitted.
(Manas Dasgupta)
