New Delhi, Oct 4: Finance Minister Arun Jaitley announced that the Centre would cut excise duty by Rs 2.50 on petrol and diesel.
Jaitley said, "Excise duty to be reduced by Rs.1.50 & OMCs will absorb 1 rupee. So, a total of Rs.2.50 will be reduced on both diesel and petrol."
"We are writing to the state governments that as the central govt is cutting Rs 2.50 on both petrol and diesel, they do the same," he said.
Jaitley said the excise duty cut would have an impact of Rs 10,500 crore on central government's tax revenues. He also asked state governments to follow suit by cutting a sales tax or VAT by a similar amount. The reduction followed petrol and diesel prices touching new highs.
He said, "World crude oil prices are on the rise, yesterday it hit the highest in the last 4 years."
Jaitley maintained that despite this cut in excise duty it would not affect the government's fiscal deficit target.
Petrol and Diesel prices in Delhi are Rs 83.99 per litre (increase by Rs 0.15) & Rs 75.45 per litre (increase by Rs 0.20), respectively. While in Mumbai, Petrol & Diesel prices are Rs 91.34 litre (increase by Rs 0.14) & Rs 80.10 (increase by Rs 0.21), respectively.