The ever increasing prices of petrol and diesel in the last two months have led to the government receiving criticism. The government has tried to better this situation by reducing the excise duty by ₹2 per litre, effective from October 4.
This move from the Indian government led to a drop in petrol prices by ₹2.5 per litre in Delhi (₹68.38 per litre) and Mumbai (₹77.51 per litre). Diesel prices also went down considerably, by around ₹2.3 per litre in Delhi (₹56.89 per litre) and ₹2.4 per litre in Mumbai (₹60.43 per litre). Before the excise cut, petrol and diesel prices had hit a new high. Petrol was up to ₹79.99 a litre and diesel ₹62.82 per litre.
The official statement released yesterday stated: “The government has decided to reduce the central excise duty on petrol and diesel by ₹2 per litre effective from October 4, 2017. This measure would help reducing the prices of petrol and diesel and giving relief to consumers. In the past few weeks, the prices of petrol and diesel have been rising due to increase in their prices in the international market. State governments are also being requested to make reduction in VAT imposed by them on petrol and diesel. The revenue loss on account of these reductions in excise duty is about ₹26,000 crore in a full year, and about ₹13,000 crore during the remaining part of the current financial year.”
Interestingly, this decision marks the first time since November 2014 that the current government has decreased excise duty.