Center cuts 2.5 rupees on petrol and diesel and asks state govt to do same


Finance Minister Arun Jaitley today announced a cut in fuel price by rupees 2.5 and further said

“During their inter-ministerial discussions, we have decided to give relief to the consumers. After the approval of PM Modi, the relief has been decided in three ways. One, the excise duty has been cut by Rs 1.5. Secondly, the OMC’s will reduce the price of fuel by Rs 1. From the central government, we have immediately cut down the price by Rs 2.5 on both petrol and diesel. Simultaneously, I am writing to the state government today that they also do the same, which means the total cut on fuel price will be Rs 5.”

He continued to say

“Central revenue as you know, is a fixed revenue. It doesn’t matter if crude oil is $60 or $75, we only get revenue according to the central excise duty. The excise duty for the state governments vary from one state to another. Some states have 31% VAT, some have less. The average of all states is 29%. So when the price of crude oil increases, the revenue for centre remains the same, because its a fixed amount. As for states, if the crude price increases, the price varies, and some get a lot of revenue.”

And finally said ball in the their court now (state governments)

“This is the time for all those states who are only criticising us for slashing oil price, ball is in their court now. They have to slash down the fuel price in their state too rather than only giving gyans with their tweets,”
Reacting positively, Governments of Gujrat and Maharastra announced additional 2.5 rupees reduction on fuel chares at their state level