Government Cuts Excise Duty On Petrol, Diesel By Rs 2 Per Litre

Lloyd Doyle
October 3, 2017

There could be some relief to people from the sky-rocketing prices of petrol and diesel as the government has chose to reduce the basic excise duty rate on them by Rs.2 per litre. A secondary and longer term effect will be on inflation and which also impact the consumer in terms of food prices however, the recent record harvest and decline in food inflation should serve as a buffer for possible interest rate increases.

The ministry said the exchequer will bear a revenue loss Rs 26,000 crore as a result of this reduction in excise duty.

Official sources said the decision has been taken by the Government to cushion the impact of rising global prices of crude petroleum oil and petrol and diesel.

The move comes at a time when the retail selling price of petrol has crossed Rs 70 in most states, while the price of diesel is close to Rs 60. The price of diesel in Kolkata is now at a 3-year high and in Mumbai and Chennai, it is the highest it has been since May and January, respectively.

The forecasted increase is likely to bring the prices to their highest point in three years.

This ascent in the costs of Petrol and Diesel is likewise reflected in WPI expansion, which has expanded to 3.24% for the long stretch of August 2017, when contrasted with 1.88% for the period of July 2017. The announcement was made in the wake of increasing crude oil prices in the worldwide market.

Excise duty on Petrol prior to the downward revision was at Rs 21.48 per liter and for Diesel at Rs 17.33 per liter, as per information provided on Indian Oil Corporation's website. On diesel basic excise duty was Rs 10.33 per litre (before the announcement), special additional excise duty of Rs 1 a litre and additional excise duty Rs 6 a litre.

Petroleum products still attract state and central levies such as excise duty and VAT (Value added tax).

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