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New Delhi: Bowing to public pressure, the government on Tuesday cut excise duty on petrol and diesel by Rs 2 per litre each to moderate the relentless rise in fuel prices witnessed for the last three months.
Petrol and diesel will cost Rs 2 a litre less from Wednesday after the first excise duty cut by the Modi government comes into effect. Petrol currently costs Rs 70.88 per litre in Delhi while a litre of diesel is priced at an all-time high of Rs 59.14.
The excise duty cut would cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year that ends on March 31, 2018, an official statement announcing the reduction said.
The government, which had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices, has been criticised for not cutting excise duty despite a sustained rise in fuel prices since early July.
In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop-up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
Retail fuel prices have been on the upswing since July 4. Oil Minister Dharmendra Pradhan’s predictions of a drop were short-lived as rates fell for just three days and reverted to their upward trajectory.
“Govt of India has reduced Basic Excise Duty rate on petrol and diesel [both branded and unbranded] by Rs 2 per litre w.e.f. 4th October,2017,” the finance ministry said in a tweet.
On petrol, the government currently levies excise duties totalling Rs 21.48 per litre while that on diesel is Rs 17.33 per litre.
“This decision (to cut excise duty) has been taken by the Government in order to cushion the impact of rising international prices of crude petroleum oil and petrol and diesel on retail sale prices of petrol and diesel as well as to protect the interest of common man,” the statement said.