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Petrol to get cheaper by ₹9.5, diesel by ₹7 as govt cuts excise duty
Finance minister Nirmala Sitharaman said the excise cut will have revenue implication of around ₹ 1 lakh crore/year for the government
The central government has decided to cut the excise duty on petrol by ₹8 per litre and on diesel by ₹6 per litre, announced Union finance minister Nirmala Sitharaman on Saturday.
“We are reducing the central excise duty on petrol by ₹ 8 per litre and on diesel by ₹ 6 per litre. This will reduce the price of petrol by ₹ 9.5 per litre and of Diesel by ₹ 7 per litre,” said Sitharaman.
Further, she also exhorted the states to implement similar cuts.
“I wish to exhort all state governments, especially the states where reduction wasn’t done during the last round (November 2021), to also implement a similar cut and give relief to the common man,” said the minister.
Post-November 2021 reduction, 25 states and UTs had cut VAT to give further reprieve to consumers battered by record-high retail prices. However, states ruled by non-NDA parties like Maharashtra, Andhra Pradesh and Tamil Nadu had not reduced VAT.
After that reduction, state-owned oil firms kept petrol and diesel prices unchanged for a record 137-day period during which international oil prices rose from USD 84 per barrel to a nearly 14-year high of USD 140.
They finally broke the hiatus with a ₹10 per litre increase on both petrol and diesel in 16 days starting 22 March but again hit the freeze button after the last revision on 6 April.
Petrol price in Delhi will from Sunday cost ₹95.91 a litre as against ₹105.41 a litre currently while diesel will cost ₹89.67 a litre as opposed to ₹96.67 a litre now.
Also, the government will give ₹200 per cylinder subsidy to Ujjwala Yojana beneficiaries for 12 cylinders in a year.
“This year, we will give a subsidy of ₹ 200 per gas cylinder (up to 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 ₹ 6100 crores a year,” said Sitharaman.
A 14.2-kg LPG cylinder costs ₹1,003 in the national capital.
This excise duty cuts along with ₹5 cut on petrol and ₹10 reduction on diesel effected from November 4, 2021, rolls back the ₹13 per litre and ₹16 per litre increase in taxes on petrol and diesel effected between March 2020 and May 2020.
The excise duty hikes of 2020 had taken central taxes on petrol to their highest level of ₹32.9 per ltire and that on diesel to ₹31.8 a litre. After the latest excise cut, the incidence of central tax on petrol will come down to ₹19.9 a litre and that on diesel to ₹15.8 per litre.
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First Published:21 May 2022, 06:55 PM IST
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