The Centre slashed excise duty on petrol and diesel fuel on Tuesday leading to a drop of over Rs 2 in prices across the country. In its statement announcing the reduction, the Centre said the rate cut will cost the government Rs 26,000 crore in annual revenue and Rs 13,000 crore through the remaining months of this fiscal. Reeling under high prices of fuel, consumers were making demands to cut down on levies on fuel to allow reduction in prices.
Fuel rates were earlier revised on a fortnightly basis but the model was changed mid-June. The fuel prices are now revised on a daily basis by the fuel companies in accordance to the global price trends of crude oil. This model was aimed at passing on the benefits immediately to the consumer.
In Delhi, the price of petrol was cut from Rs 70.88 per litre on Tuesday to to Rs 68.38 per litre on Wednesday. Similarly, the price of diesel was slashed from Rs 59.14 per litre on Tuesday to Rs 56.89 per litre on Wednesday.
Chennai saw a reduction of petrol prices from Rs 73.48 per litre on Tuesday to Rs 70.85 per litre on Wednesday. Diesel price fell on Wednesday to Rs 59.89 per litre from the previous day’s price of Rs 62.30 per litre.
Hyderabad also got relief as petrol prices fell from Rs 75.06 per litre on Tuesday to Rs 72.40 per litre on Wednesday. The price of diesel was reduced from Rs 64.25 per litre on Tuesday to Rs 61.81 per litre on Wednesday.
In Kolkata, the price of petrol and diesel on Tuesday stood at Rs 73.62 per litre and Rs 61.80 per litre, respectively. On Sunday, the price of petrol was cut to Rs 71.16 per litre and diesel was made cheaper at Rs 59.55 per litre.
Bengaluru saw a cut in the price of petrol from Rs 71. 99 per litre on Tuesday to Rs 69.44 per litre on Wednesday. Diesel fell from Rs 59.25 per litre on Tuesday to Rs 56.96 per litre on Wednesday.
Mumbai also got a much awaited cost decrease. The price of petrol dropped from Rs 79.99 on Tuesday to Rs 77.51 on Wednesday. Diesel sold cheaper on Wednesday at Rs 60.43 per litre against Tuesday’s price of Rs 62.82 per litre.
The prices across the country are also not the same of a certain fuel on any given day since each state forms its own economic policy setting out its own state taxes and levies. The cost of processing and transportation also vary in states hence costs vary to great degree in cities across the country.
Petroleum products have been left out of the ambit of GST as well and so the price excise duty and VAT are key to changing fuel prices, apart from global prices. India’s needs for petroleum fuels is met largely by imports (up to 80 per cent). Therefore, it was decided in April 2002 to align domestic fuel costs to equivalent fuels in international markets.