Apart from this, the oil marketing companies in India have been asked to bear the remaining burden of Re 1 per every litre and with this, the customers will get a relief of Rs 2.50 per litre on both petrol and diesel. However, opposition ruled states remained non-committal on reducing Value-Added Tax. Petrol in Maharashtra had crossed Rs 91 per litre and diesel was selling above Rs 80 per litre before the state and central government made a decision to lower taxes.
The fuel prices had been going up every day for last few weeks, burning a hole in people's pockets. "The problem is serious", Mr Jaitley said, amid the opposition's attacks that the government has not done enough - despite cutting excise duty - to reduce petrol and diesel prices.
Fuel prices cut by ₹2.50 ($.034) a litre in several states across India.
The price of petrol in Delhi on Friday (Oct 5) was Rs 81.50 per litre while in Mumbai it was Rs 86.97. Worldwide crude oil prices are linked to geopolity, fluctuation in the exchange rate as well as the tax structure of respective states and the Centre.
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. "So the impact will be Rs 10,500 crore in current fiscal which is only 0.05 per cent of fiscal deficit".
► Gujarat CM Vijay Rupani said: "Finance Minister Sh @arunjaitley Ji has announced Rs.2.5 cuts in petrol & diesel prices, reciprocating positively to FM's announcement, the Govt Of Gujarat has also chose to reduce Rs.2.50 on both petrol & diesel".
On September 15, the government had announced an array of steps, including removal of withholding tax on Masala bonds, relaxation for FPIs, and curbs on non-essential imports, to contain the widening CAD and check the rupee fall.
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