Finance Minister Arun Jaitley today announced marginal relief for citizens from runaway fuel prices with excise duty cut of Rs. 1.50 and another Re 1 drop by oil marketing companies, taking the cut in fuel prices to Rs. 2.50. He blamed rising crude oil prices in the international markets for the rise in fuel prices in India. He appealed to the states to match the centre’s effort by reducing value-added tax or VAT by Rs. 2.50 so that the total benefit to citizens is at least Rs.5.
Five BJP-ruled states — Gujarat, Maharashtra, Chhattisgarh, Assam and Tripura — responded by dropping fuel prices by Rs. 2.50. Jharkhand has reduced diesel prices by Rs. 2.50, but not of petrol. The excise duty cut would dent the government’s tax revenue by Rs. 10,500 crore, the finance minister said. Taxes on petrol and diesel, which account for more than a third of retail fuel prices, are one of the biggest sources of income for the government.