The central government has reduced the excise duty by Rs 1.50 while the state-owned oil marketing companies have been directed to absorb another rupee of price cuts. While Jharkhand has cut diesel prices by Rs 2.50, but there has been no announcement of petrol yet. Rupani also announced that petrol and diesel would be cheaper by Rs 5 cheaper in Gujarat.
The consumers will get a benefit of Rs. 2.50, said finance minister Arun Jaitley while announcing the decision. So it is easier for states to forego a part of the additional revenue that they receive due to price increase. Since August 2018, the states of Karnataka, Rajasthan, Andhra Pradesh, West Bengal and Kerala cut fuel prices by anywhere between Re 1 to Rs 2. "UP Govt has also chose to give additional relief of Rs. 2.50 per litre on the prices of petrol & diesel", said CM Yogi Adityanath.
"We are writing to the state governments that as the central government is cutting Rs 2.50 on both petrol and diesel, they do the same", Jaitley added.
"When the prices go up the Centre receives a fixed amount per litre, whereas the revenue of states go up". The prices of petrol are maximum across the state, soaring above Rs 91 in many districts of the state. On Thursday, October 4, the price of petrol hit the Rs 84 per litre mark in Delhi while diesel cost went Rs 80 per litre in Mumbai.
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"The Brent oil since yesterday has crossed 86$/bbl which is the highest in the last four years".
Rupee Thursday dropped to 73.77 against the dollar, resulting in expensive crude imports. The centre levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. "Consequently, we are hoping for a Rs 5 per litre reduction", the finance minister said.
The Congress party said the move is like applying a band-aid after inflicting a thousand wounds on the people of the country.
"The impact will be about Rs 21,000 crore for the full fiscal".