Fuel Prices: Center Finally Responds To Common Man’s Plight

Fuel Prices: Center Finally Responds To Common Man’s Plight

Following this, the Gujarat and Maharashtra Governments announced additional relief of Rs2.5/litre Petrol/Diesel.

The new prices became applicable from Thursday midnight.

All four states are BJP ruled.

The decision was taken during a closed-door meeting between the Prime Minister Narendra Modi, Jaitley and petroleum minister Dharmendra Pradhan.

BJP chief Amit Shah was closeted with three senior ministers on Wednesday and discussed the need for cutting fuel prices, sources said. Petrol in Maharashtra had crossed Rs 91 per litre and diesel was selling above Rs 80 per litre before the state and central government chose to lower taxes.

Finance Minister Arun Jaitley has announced that effective immediately, prices of petrol and diesel will be slashed by Rs 2.5, pan India.

The Bihar government lowered the value added tax (VAT) on petrol and diesel on Friday which made these fuels cheaper by Rs 2.52 and Rs 2.55 a litre, respectively. But there are two factors, both external: one is the oil prices and the second is the policies within the USA which is leading to the hardening of the dollar itself, and therefore affecting other currencies all over the world.

Jaitley said India had huge avenues of growth over the next 10-20 years to sustain its high growth rate.

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Other index heavyweights such as ITC Ltd and Hindustan Unilever Ltd were also trading lower, down 1.8% and 2.4%, respectively. He said states collect extra taxes when oil prices go up since their taxes are ad valorem. The states where the prices have been decreased are Gujarat, Chhattisgarh, Tripura, Jharkhand, Uttar Pradesh, Madhya Pradesh, Maharashtra, Himachal Pradesh, Haryana, Assam, Arunachal Pradesh, Uttarakhand, Jammu and Kashmir and Goa, said reports.

This is the second time in one year that the Centre has cut excise duty on petrol and diesel as rising prices pinch the common man. "Let me categorically assure all that there is no going back on deregulation of oil prices", he added. Of this, IOC's share would be roughly half and the rest split equally between HPCL and BPCL.

Nearly half of the fuel price is made up of taxes. Diesel is priced at Rs 80.10 per litre in the city.

Mr Jaitley expressed hope that the states will reduce state tax on fuel along with centre's move.

Nationalist Congress Party's Leader of Opposition in the Legislative Council Dhananjay Munde criticized the belated decision and reiterated that petrol-diesel must be brought under GST for providing genuine relief to the people.

► Meanwhile, Karnataka CM HD Kumaraswamy said that they have already cut the price by Rs 2 last month.

In Mumbai, petrol is up 18 paise and is now being retailed at Rs 87.15 per litre. "So the impact will be Rs 10,500 crore in current fiscal which is only 0.05 per cent of fiscal deficit".

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