Andhra Pradesh: Petrol And Diesel Price Slashed By Rs. 2 Per Litre

Andhra Pradesh: Petrol And Diesel Price Slashed By Rs. 2 Per Litre (representational image)

New Delhi: Chandrababu Naidu, became the second chief minister to announce, a cut in state tax for fuel, which will bring down prices by Rs. 2 per litre and cost the exchequer around Rs. 1,120 crore. The announcement came after the 22 opposition parties are holding a nationwide strike called by the Congress over rising fuel prices and the falling rupee. The strike has been supported by Mr Naidu's Telugu Desam Party.

Following US sanctions on Iraq, the oil prices started to rise and  rupee plunged against the dollar, there have been calls to reduce tax. A similar cut was announced by Rajasthan's CM Vasundhara Raje.

The Chief Minister announced the price cut in the state assembly and said, "the common man is reeling under the impact of growing prices and I appeal to the Centre to reduce prices".

The Oil prices in the country have been tied to the cost of crude oil in international market. Both state and centre imposes tax. A reduction in retail prices can happen only if excise duty is reduced -- in which case the Centre and state governments bear the loss, or the oil firms bear it directly.

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The Value added tax or VAT, in Andhra Pradesh, has been among the highest anywhere -- 35.77 per cent for petrol, next only to Maharashtra and Madhya Pradesh, and 28.08 per cent for diesel, the highest in the country.

By the end of the year, the state of Rajasthan is going to polls and Andhra Pradesh is set to go to polls by April-May 2019. The BJP ruling at the Centre was targeted by Mr Naidu, saying they are increasing collections with excise and other taxes but not passing on any relief to the ordinary Indian.

 Ravi Shankar Prasad, the Union Minister called the rising fuel prices, a "momentary trouble".

"Diesel, petrol price rise is out of our hands because oil producing countries have limited production," the minister said, adding, "We're not saying we can't do anything. We're saying this is a momentary trouble".

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