The central government cut excise duty on petrol by a record Rs 8 per litre and that on diesel by Rs 6 per litre, which will lead to a welcome drop in fuel prices. The cut will translate into a reduction of Rs 9.5 per litre in petrol prices and Rs 7 per litre in diesel, after taking into account its impact on other levies. Tweeting “people first for us”, Prime Minister Narendra Modi said the announcements will bring relief to citizens and “further ease of living”.
“It is always people first for us! Today’s decisions, especially the one relating to a significant drop in petrol and diesel prices will positively impact various sectors, provide relief to our citizens and further ‘Ease of Living.’” PM Modi said on Twitter. Amid inflation, the Centre has also decided to give a subsidy of Rs 200 per gas cylinder (up to 12 cylinders) to over nine crore beneficiaries of the Pradhan Mantri Ujjwala Yojana.
“Today, the world is passing through difficult times. Even as the world is recovering from the Covid-19 pandemic, the Ukraine conflict has brought in supply chain problems and shortages of various goods. This is resulting in inflation & economic distress in a lot of countries,” Sitharaman said.
Which states have reduced VAT on petrol and diesel?
Taking to Twitter, Finance Minister Nirmala Sitharaman said, “It will have revenue implication of around Rs one lakh crore/year for the government.”
Soon after her announcement on fuel prices, other states including Rajasthan and Kerala slashed Value-added Tax (VAT) on petrol and diesel. Rajasthan Chief Minister Ashok Gehlot announced a Rs 2.48 per litre reduction in VAT on petrol and Rs 1.16 per litre reduction in VAT on diesel.
On Twitter, he wrote, “Due to the reduction in the prices of petrol and diesel by the central government, the state government will reduce VAT by Rs 2.48 per litre on petrol and Rs 1.16 per litre on diesel. With this, petrol will be cheaper by Rs 10.48 and diesel by Rs 7.16 per litre in the state.”
The duty cuts on auto fuels effective Sunday have brought Central taxes on petrol and diesel to pre-pandemic levels. The move, analysts said, could help reduce inflation by up to 20 basis points from June on.
Thanks for Reading!!