Video Editor: Vishal Kumar
The central government lowered prices of auto fuels by Rs 2.5 per litre to cushion consumers as they hit fresh highs every day because of a surge in crude oil.
The government lowered the excise duty on petrol and diesel Rs 1.50 per litre, Finance Minister Arun Jaitley said in a press conference on Thursday, 4 October. It also asked oil marketers to cut retail prices by Re 1. Jaitley asked states to match the excise duty cut announced by the central government.
Auto fuel prices rose as the Brent crude surged to an over four-year high of $86 a barrel. A weaker rupee only made imports costlier.
Jaitley, however, downplayed fiscal implications around the fuel price cut.
“The impact will be about Rs 21,000 crore for the full fiscal. Since this is for half year, the impact will be Rs 10,500 crore which is only 0.05 percent of the fiscal deficit,” he said.
“I am confident we'll be able to maintain the fiscal deficit even after absorbing this,” the minister said.
Auto fuel prices are revised daily after the government deregulated them. After the decision to check rising prices today, shares of oil marketing companies tumbled.
Indian Oil Limited fell as much as 18.24 percent, Bharat Petroleum Corporation Limited declined 19 percent and Hindustan Peroleum Corporation Limited plunged 22 percent.
Jaitley, however, said the oil marketers are fully competent to deal with the decision. “Their financial position is much stronger than what it was earlier,” he said, adding that the government was not going back on fuel price deregulation.
Following suit, Gujarat, Maharashtra, Jharkhand, Chhattisgarh and Tripura announced their compliance with directions issued by the Centre.
Talking to ANI, Chief Minister of Chattisgarh Raman Singh said, “Government of Chhattisgarh has also decided to reduce Rs 2.50 on both petrol and diesel in the state. Thus petrol and diesel will be Rs 5 cheaper in Chhattisgarh.”
Jharkhand government has decided to give an additional relief of Rs 2.5 per litre on diesel in the state, Chief Minister Raghubar Das said, reported ANI.
(With inputs from Bloomberg Quint and ANI)
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