The Indian government has finally listened to the concerns of common citizens and has reduced the excise duty on petrol by Rs 8 per litre while dropping the same on diesel by Rs 6 per litre. Essentially, this implies that the overall price of petrol will be reduced by Rs 9.5 per litre and the price of diesel will be reduced by Rs 7.
Finance Minister Nirmala Sitharaman announced the duty reductions yesterday on Twitter in a series of tweets. The FM has also asked state governments to lower the fuel costs, particularly to those who did not declare a reduction during the last time, in November of 2021.
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The 2020 excise duty hikes increased central taxes on fuel to their highest level of 32.9 per litre and on diesel to 31.8 per litre. In Mumbai, petrol costs 120.51 per litre, while diesel costs 104.77 from Sunday onwards, will drop to 111.01 per litre, while diesel will cost 97.77 per litre. Petrol in Delhi will cost 95.91 a litre from tomorrow, down from 105.41 a litre today, while the diesel will cost 89.67 a litre, down from 96.67 a litre today.
The price of petrol in Kolkata would fall to 105.62 per litre from 115.12. Meanwhile, the price of diesel in Kolkata would reduce to 92.83 per litre. Likewise, petrol in Chennai will cost 101.35 per litre starting tomorrow, up from 110.85 now, and diesel will cost 93.94 per litre, up from 100.94 currently.
Following the reduction in fuel prices announced by the Centre, Kerala has become the first state government to announce a cut in tax on petrol and diesel prices of Rs 2.41 and Rs 1.36 per litre, respectively. Kerala Finance Minister K N Balagopal announced the reduction in state tax, claiming that the Union government has reduced the hefty fee imposed by it. The minister also praised the decision made by the Centre. Although it remains to be seen whether more states would decrease fuel taxes because the tax on fuel accounts for a large portion of the state’s revenue and letting it go in portions would be a difficult issue for states, both economically and politically.
Balagopal in his statement on the lowering of tax on fuel said, “The Union government has partially reduced the huge tax on petrol and diesel. Kerala government welcomes this decision,” He further added, “…state government will reduce state tax on the price of petrol and diesel by Rs 2.41 and Rs 1.36 per litre respectively”
The Finance Minister in her Twitter threads further stated that the government will provide a subsidy of Rs 200 per gas cylinder (up to 12 cylinders) to over 9 crore Pradhan Mantri Ujjwala Yojana beneficiaries. The revenue impact of the excise tax drop will be roughly Rs 1 lakh crore per year, while the Ujjwala Yojana’s subsidy on LPG cylinders will cost the public purse Rs 6,100 crore per year, according to the minister.
The FM also announced the calibration of customs duty on raw materials and intermediaries for iron and steel to lower their prices. The import tariff on some steel raw materials will also be cut, as will the export duty on some steel products.
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