Pertinently, Union Finance Minister, Arun Jaitley Thursday announced a cut of Rs 2.50 per litre in petrol and diesel prices. Jaitley also urged state governments to further reduce VAT and other state-level taxes to further drop the price.
The move by the central and state governments will cost the exchequer a significant amount but will provide relief for consumers.
The new fuel prices would be effective in the state from this midnight, an official spokesman said. Congress president Rahul Gandhi was also in the forefront of the attack on Modi, for being silent on the "sky-rocketing" petrol and diesel prices.
Acting quickly on the orders of the BJP president, the party-ruled governments in Maharashtra, Uttar Pradesh, Gujarat, Madhya Pradesh, Himachal Pradesh, Jharkhand, Chhattisgarh, Uttarakhand, Haryana, Assam, Arunachal Pradesh, Goa and Tripura announced a Rs 2.50 cut in Value-Added Tax on the fuels.
► Maharashtra CM Devendra Fadnavis said: "Maharashtra government also chose to give additional relief of Rs 2.50 per litre on petrol to give a total benefit of Rs 5 per litre in the state of Maharashtra".
To curb the skyrocketing fuel prices, Finance Minister Arun Jaitley on Thursday announced a cut of Rs 2.5 in the prices of both petrol and diesel.
He said that Kerala would not reduce the tax on petroleum products as it would adversely affect the revenue of the state.
Brent oil on Wednesday crossed $86 per barrel, which is the highest in the last four years, and rising interest rates in the USA have a significant impact across global markets, said Jaitley.
It had resisted the call for a reduction in excise duty since May when retail rates first shot up and then again from mid-August when fuel prices started moving up.
After Cabinet meeting later in the day, the ministers briefed Prime Minister Narendra Modi on the urgency to cut excise duty.
Jammu and Kashmir, which is now under Governor's rule, also announced a reduction of Rs 2.50 on fuel prices. But growing public anger over surging fuel prices has caught the attention of the government. The total impact of the excise duty cut on us for the entire fiscal would have been Rs 21,000 crore. But it is unclear how many of India's 29 states will meet the request, though some had in recent weeks already reduced their take.
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