Big Relief! Fuel prices slashed substantially, Auto News, ET Auto

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 Nirmala Sitharaman
Nirmala Sitharaman

New Delhi: The Centre on Saturday finally slashed excise duty on petrol and diesel by INR 8 and INR 6 per litre respectively resulting in a decrease in the price of petrol by INR 9.5 per litre and of diesel by INR 7 per litre.

Finance Minister Nirmala Sitharaman made several announcements today, including a sharp cut in central excise duty on fuel prices. The announcements come as retail inflation surged to an eight-year high in April, driven by rising fuel and food prices

It [Excise duty cut] will have a revenue implication of around INR one lakh crore/year for the governmentNirmala Sitharaman, Finance Minister

Earlier the excise duty on petrol had gone up from INR 9.48 per litre in 2014 then to INR 22.98 on 14 March 2020 to INR 32.90 a litre in 2 February 2021. For diesel, this increase is from INR 3.56 a litre in 2014 then to INR 18.83 and finally to INR 31.80. Today the excise duty on petrol is reduced from INR 32.90 a litre to INR 24.9 whereas, duty on diesel is reduced from INR 31.80 a litre to INR 25.8.

According to current fuel prices, petrol in Delhi costs INR 105.41 a litre and diesel INR 96.67 a litre. In Mumbai, petrol and diesel prices are at INR 120.51 and INR 104.77 per litre, respectively and in Kolkata, petrol is at INR 115.12 per litre and diesel at INR 99.83 per litre.

Oil marketing companies (OMCs) began to raise retail prices of fuel on March 22. In March, the hike was INR 6.40 a litre each and in April the hike was INR 3.60 a litre each. In May, there has been no change in prices, so far.

India meets 80% of its oil needs through imports. Retail rates are adjusted according to the global movement in crude prices.

Sitharaman said the government is also reducing the customs duty on raw materials and intermediaries for plastic products where India’s import dependence is high. “Import duty on some raw materials of steel will be reduced. Export duty on some steel products will be levied,” she added.

“Keeping in line with the government’s ‘commitment to help the poor & common man, today, we are announcing more steps to help our people,” read FM’s post.Here are the main points from FM’s tweet post reported by ET:

– This year, the govt will give a subsidy of INR 200 per gas cylinder (upto 12 cylinders) to over 9 crore beneficiaries of Pradhan Mantri Ujjwala Yojana. This will help our mothers and sisters. This will have a revenue implication of around INR 6100 crore a year.

– The Centre is also reducing the customs duty on raw materials & intermediaries for plastic products where our import dependence is high. This will result in reduction of cost of final products.

– On a similar note, the Centre is also calibrating customs duty on raw materials & intermediaries for iron & steel to reduce their prices. Import duty on some raw materials of steel will be reduced. Export duty on some steel products will be levied.

– On the availability of cement, she said measures are being taken up to improve the availability of cement and through better logistics to reduce the cost of cement. Notifications with specific details on all the above will be issued by government within the next hour.