Petrol prices to come down by Rs 9.5 a litre, diesel by Rs 7 as Centre cuts excise duty
The government also announced a subsidy of Rs 200 per gas cylinder for more than 9 crore beneficiaries of the Pradhan Mantri Ujjwala Yojana.
The Centre on Saturday announced that it was slashing the excise duty on petrol by Rs 8 per litre and diesel by Rs 6 a litre.
In a tweet, Finance Minister Nirmala Sitharaman said that this will reduce the price of petrol by Rs 9.5 per litre and diesel by Rs 7 a litre.
She said that the decision will have a revenue impact of Rs 1 lakh crore per year for the government.
“I wish to exhort all state governments, especially the states where reduction wasn’t done during the last round [November 2021], to also implement a similar cut and give relief to the common man,” she said.
Sitharaman also announced that a subsidy of Rs 200 per gas cylinder will be given this year to more than 9 crore beneficiaries of the Pradhan Mantri Ujjwala Yojana. The decision will have a revenue implication of Rs 6,100 crore a year, she added.
The subsidy will be applicable up to 12 cylinders.
Prime Minister Narendra Modi said that the decisions, particularly the one about excise duty on fuel, would have a positive impact on several sectors and provide relief to citizens. “It is always people first for us,” he said.
Modi added that the decision on the Ujjwala scheme “will greatly ease family budgets”.
However, Congress spokesperson Randeep Singh Surjewala said that the excise duty on petrol in May 2014, when the Modi-led government came to power, was Rs 9.48 per litre. He added that the excise duty before the latest announcement was Rs 27.90 per litre.
“You increased excise on petrol by Rs 18.42 per litre and now reduced it by Rs 8 per litre,” Surjewala said. “It is still Rs 19.90 vs Rs 9.48 during Congress [rule].”
In a similar vein, he said that the excise duty on diesel in May 2014 was Rs 3.56 a litre, and is now Rs 15.80 per litre. “Nation doesn’t need jugglery of figures to dupe the people,” the Congress leader added. “Stop deceiving, Show the courage to give relief.”
Both LPG and fuel prices have been hiked several times since the the Assembly election results of Uttarakhand, Uttar Pradesh, Manipur, Goa and Punjab were declared on March 10.
Fuel prices were last hiked on April 6, when the rates of petrol and diesel were increased by 80 paise each. The prices of petrol and diesel have increased by Rs 10 in total after the Assembly election results.
Compressed natural gas prices have also witnessed an increase of Rs 18.98 per kg in the last 51 days. It now costs 75.61 in Delhi after an increase of Rs 2 per kg earlier on Saturday.
The cost of domestic liquefied petroleum gas, or LPG, was also increased on Thursday by Rs 3.50 per cylinder. As a result of the price increase – the second this month – a 14.2-kilograms domestic LPG cylinder now costs Rs 1,003 in Delhi. On May 7, the price of cylinders had been hiked by Rs 50. On March 22, the rates had been raised by another Rs 50.
Fuel prices has been one of the major factors in the rise in India’s inflation levels. India’s retail inflation rose to an eight-year high of 7.79% in April. Meanwhile, the price rise indicator in wholesale markets was at 15.08% in April. It has now remained in double digits for 13 consecutive months.
Earlier on November 3, the Union government had cut excise duty on petrol and diesel by Rs 5 and Rs 10. After the announcement, 19 states and seven Union Territories reduced value added tax on fuel, according to The Indian Express.
Opposition-ruled states Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala and Jharkhand had not reduced value added tax after the Centre’s announcement.
Meanwhile, Sitharaman on Saturday also made a slew of announcements on other sectors of the economy. She stated that the Union government will reduce custom duty on raw materials and intermediaries for plastic products “where our import dependence is high”.
The finance minister said that this would reduce the cost of the final products.
“Similarly we are calibrating customs duty on raw materials and intermediaries for iron and steel to reduce their prices,” Sitharaman said. “Import duty on some raw materials of steel will be reduced. Export duty on some steel products will be levied.”
The finance minister added that the government was taking measures to improve the availability of cement and reduce its cost.