Yesterday Finance Minister Arun Jaitley announced that fuel prices have been cut by Rs 2.50 which came into effect at 12:00 AM on the 5th of October 2018.
The Center had reduced the excise duty on fuel by Rs 1.50 and asked the oil companies to absorb another Rs 1.
BJP-ruled Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Chhattisgarh, Assam, Uttarakhand, Himachal Pradesh and Tripura have already announced price cuts for diesel and petrol. Jharkhand has reduced the price of diesel.
However, the opposition-ruled states are yet to take a stand.
The reduction in excise duty, only the second in four years of BJP-led NDA rule, will dent government revenues by Rs 10,500 crore and was aimed at cooling retail prices that had shot up to an all-time high.
The relief to consumers will be in three parts — centre will cut excise duty by Rs 1.5, and oil marketing companies (OMCs) will factor in Re 1 in their pricing, and states have been asked to cut VAT as they have raked in windfall gains due to ad valorem nature of the levy that results in higher realization whenever rates move up
The oil companies to absorb the Rs 1move can be seen as a return of government control over pricing. The oil companies had freedom over pricing.
This comes at a time when the value of Rupee falls down against Dollar by 73.77.
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