The Centre has announced excise duty cut on petrol and diesel by ₹5 and ₹10 respectively from tomorrow (Thursday) on the eve of Diwali. Announcing the decision, the Ministry of Finance said that the economy was picking up and to give a further fillip to the growth, the government had deiced to significantly reduce the excise duty on diesel and petrol. It said the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season. Today, the ministry said that in recent months, crude oil prices have witnessed a global upsurge and consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure. It further said the world has also seen shortages and increased prices of all forms of energy. “The Indian economy has witnessed a remarkable turnaround post the Covid induced slowdown. All sectors of the economy – be it manufacturing, services or agriculture – are experiencing significant upward economic activity," it said.
The reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes. Today’s decision is expected to further spur the overall economic cycle, it added. The ministry urged the states to reduce VAT on petrol and diesel to give relief to consumers. The move has come when the opposition has been regularly attacking the government on rising fuel prices. On November 1, Congress leader Rahul Gandhi had tweeted while referring to petrol and diesel rates, that one should beware of "pickpockets". While petrol prices have crossed the ₹ 100 mark in all the four metros, diesel prices too have gone past the coveted mark in three metro cities while it is at ₹ 98.42 per litre in the national capital. In fact Petrol prices have risen by about ₹ 34 per litre in two years and ₹ 26 in a year on a steep climb in global oil prices and taxes. Diesel prices have increased by ₹ 29.5 per litre in two years and ₹ 25 in a year.