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Petrol, Diesel Prices Cut By Rs. 2.50, By Centre, Asks States To Make It Rs. 5
Fuel price: Finance Minister Arun Jaitley appealed to the states to match the centre's effort by reducing value-added tax or VAT by Rs. 2.50 so that the total benefit to citizens is at least Rs. 5
Petrol, Diesel Prices Cut By Rs. 2.50, By Centre, Asks States To Make It Rs. 5 (file image)
New Delhi: Today, Arun Jaitley, the Finance Minister of India announced marginal relief for citizens from runaway fuel prices with oil duty cut of Rs. 1.50 and another Re 1 drop by oil marketing companies. For the rise in fuel prices in India, he blamed rising crude oil prices in the international markets.
The Finance Minister then appealed to the states to match the efforts of the centre by reducing VAT by Rs. 2.50 so that the total benefit to citizens is at least Rs. 5. Four BJP-ruled states -- Gujarat, Maharashtra, Chhattisgarh and Tripura -- immediately responded by dropping fuel prices by Rs. 2.50. The sources said that all BJP-ruled states are expected to cut fuel prices by this evening.
The Rs. 2.50 benefit for citizens is within the control of the government and oil marketing companies, the finance minister said. Mr Jaitley said, "I am sure the states will also start delivering immediately," amid the opposition's allegations that the economy is under severe stress.
This would cut down government's tax revenue by Rs. 10,500 crore, said the finance minister. Taxes on petrol and diesel, which account for more than a third of retail fuel prices, are one of the biggest sources of income for the government.
Minutes after Mr Jaitley's announcement, the Gujarat government slashed Rs. 2.50 on petrol and diesel.
Arun Jaitley's announcement followed petrol and diesel prices touching a new high. In Delhi, where oil prices are the lowest among big cities, petrol is being sold at Rs. 84 per litre and diesel at Rs. 75.45.
On Wednesday, Mr Jaitley said crude oil touched four-year high of $86 a barrel and interest rates in the US have reached a seven-year high.
After the announcement, the stocks of oil marketing firms such as Hindustan Petroleum, Indian Oil Corporation and Bharat Petroleum fell by over 18 per cent as they would be sharing the burden of the fuel price cut at a time when crude prices are high.
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