Finance Minister Arun Jaitley announced a cut of Rs 2.50 in fuel prices. The slashing of fuel prices comes from excise duty cut of Rs. 1.50 and Re 1 drop by oil marketing companies. Finance Minister blamed rising crude oil prices in the international markets as the reason for the rise in fuel prices in India. The revised prices will be effective from midnight.
Arun Jaitley, Finance Minister, said, “Excise duty to be reduced by Rs.1.50 & OMCs will absorb 1 rupee. So, a total of Rs.2.50 will be reduced on both diesel and petrol.” He also said that the central government will be writing to all state governments to cut the prices of petrol and diesel by a further Rs 2.50 by cutting sales tax or value added tax (VAT).
He appealed to the states to match the centre's effort by reducing value-added tax or VAT by Rs. 2.50 so that the total benefit to citizens is at least Rs. 5. Five BJP-ruled states -- Gujarat, Maharashtra, Chhattisgarh, Assam and Tripura -- responded by dropping fuel prices by Rs. 2.50. Jharkhand has reduced diesel prices by Rs. 2.50, but not of petrol.
The Rs. 2.50 benefit for citizens is within the control of the government and oil marketing companies, the finance minister said. "I am sure the states will also start delivering immediately," Mr Jaitley said, amid the opposition's allegations that the economy is under severe stress.