What Consumers Pay For Petrol, Diesel After Price Cuts

Kenny Grant
October 6, 2018

The Gujarat Chief Minister tweeted that it has matched the central government's reduction, and that petrol and diesel are now cheaper by Rs 5 per litre. Chandigarh has reduced the fuel prices by Rs 1.50. Auto fuel prices in these states are expected to go down by Rs 5 per litre.

Announcing the decision, Finance Minister Arun Jaitley asked the state governments to match the move with a similar reduction in sales tax or VAT.

This reduction in petrol prices was needed, as Maharashtra recently breached Rs 90 per litre mark, and speculations were rife that the price of petrol will soon touch Rs 100.

Since the government came to power in May 2014, it has used tax increases on petrol and diesel prices to raise funds for welfare programmes.

Jaitley made this announcement at a surprise press conference in New Delhi where he once again, blamed global crude prices for the near-daily rise in petrol and diesel prices. Diesel is priced at Rs 80.10 per litre in the city. Maharashtra and Gujarat were quick to respond.

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Tripura too has chose to match the reduction by Rs 2.5 per liter.

Petrol prices on Thursday touched an all-time high of Rs 91.34 per litre in Mumbai.

However, Maharashtra cut Value-Added Tax only on petrol, attracting criticism that it was acting in the interests of the affluent sections of people. This means that petrol will continue to be expensive in Delhi. If the Centre is serious, it should reduce the tax to what it was when it assumed office. The way oil prices have been going up, there has been some adverse impact on the CAD.

The shares of Indian oil marketing companies sank after the announcement, with Indian Oil Stocks down by 18.24 percent, HPCL stocks tumbled by 22 percent and BPCL stocks declined by 19 percent.

Indian Oil Corp: Loss of 11.4%. For instance, if worldwide oil prices keep going up and we tweak the taxes, it will not bring any benefits. "Find Out How?", 5 out of 5 based on 1 ratings.

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