Economy

‘Panic reaction ahead of elections,’ says Congress after fuel price cut

‘Panic reaction ahead of elections,’ says Congress after fuel price cut”

After months of torturing the general public with soaring fuel prices, Finance Minister Arun Jaitely on Thursday announced a petty reduction of Rs 2.5 per litre on both diesel and petrol prices across the country.

While Rs 1.5 will be reduced in the excise duty, Oil Marketing companies will absorb Rs 1 reduced in price. The governments of Maharashtra, Gujarat, Chhattisgarh, Jharkhand and Uttar Pradesh - all under the rule of the Bharatiya Janata Party - have already said they will do so. He said that while the Centre has cut excise duty on petrol and diesel by Rs 1.50 per litre, the Oil Marketing Companies (OMCs) will further reduce prices by Re 1 per litre.

Maharashtra's Chief Minister Devendra Fadnavis has just announced an additional relief of Rs 2.5/litre resulting in a total Rs 5/litre drop in petrol prices.

Jaitley said the government wanted "to provide relief to consumers as the global crude price had touched $86 per barrel, a four-year high". That's aimed at checking a rise in retail prices which hit new highs every day as the Brent crude surged 28 percent his year.

Union Territory Chandigarh on Friday announced a Rs 1.50 per litre cut in petrol and diesel prices, effective from Friday midnight.

BJP chief Amit Shah said the decision showed the government's sensitivity towards welfare.

"Respected Modiji, the common man is very distressed over skyrocketing prices of petrol and diesel".

The RBI said that the state-owned oil companies can raise external commercial borrowings (ECBs) for working capital with minimum average maturity of 3-5 years and they don't have to mandatorily hedge all ECBs. As a measure to curb the growing menace, the government has finally stepped in by trimming down the excise duty on fuel prices to bring in relief to the end users. Diesel prices in Chennai increased by 22 paise to Rs 79.79 a litre and by 20 paise to Rs 77.30 per litre in Kolkata.

Brent, the benchmark for more than half the world's oil, has touched United States dollars 86 per barrel mark, the highest in four years.

Jaitley was still speaking as of last updating this report. "First we will see the order, then make a decision on petrol and diesel [prices]", he added. Delhi charges a Value-Added Tax of 27 per cent on petrol and 17.24 per cent on diesel. "So the impact will be Rs 10,500 crore in current fiscal which is only 0.05 per cent of fiscal deficit".



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