Giving a respite to the consumers reeling under the high price of auto fuels, the government, on the eve of Diwali on Wednesday, announced a cut in the excise duty on petrol and diesel by Rs 5 and Rs 10, respectively. The prices of petrol and diesel will come down accordingly.
The reduced excise duty will come into effect from tomorrow, the Ministry of Finance said in a release.
"The reduction in excise duty on diesel will be double that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season," it said.
The prices of auto fuels have been on the rise for the last few months, with a litre of petrol costing as high as Rs 118 in some cities and diesel selling for as much as Rs 108 per litre.
Also Read: WHO grants emergency use listing to Bharat Biotech's Covaxin
The government said it has also urged states to commensurately reduce VAT on petrol and diesel to give relief to consumers.
In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure. The world has also seen shortages and increased prices of all forms of energy, the government said.
"The Government of India has made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet our requirements," it added.
The decision to cut the excise duty will provide further fillip to the economy which is strongly recovering from the pandemic. "The reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes. Today's decision is expected to further spur the overall economic cycle," the release said.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today