On top of the excise duty cut, which will cost the exchequer Rs 21,000 crore in a full year, the government has asked oil marketing companies to share a burden of Re 1 per litre of fuel, which will result in under-recoveries.
The Finance Minister said the situation has arisen because of international crude prices even as domestic parameters remain strong. The decision to cut, he said, was taken after a meeting with Petroleum Minister Dharmendra Pradhan.
Blaming US' trade war with China and tensions with oil-producing countries for the spiraling petrol and diesel prices and the depreciation of the rupee, Amit Shah said both the government and the BJP were concerned about the developments.
The plea by Puja Mahajan, a resident of the national capital, sought directions to the central government to treat petrol and diesel as "essential commodities" and fix a "fair price" for the petroleum products.