Bringing a big relief for citizens across the country, the central government announced a reduction in excise duty on petrol and diesel. The excise duty on petrol has been reduced by Rs. 5 while diesel sees a price cut of Rs. 10. The new and reduced prices will be applicable from November 4, 2021, and is the centre's gift on the auspicious occasion of Diwali. It's unclear at the moment if the price reduction is temporary or will it go back to previous levels post the festive season.
In an official statement, the government said, "The reduction in excise duty on diesel will be double that of petrol and will come as a boost to the farmers during the upcoming Rabi season."
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Adding further, the statement read, "In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure. The world has also seen shortages and increased prices of all forms of energy. The Government of India has made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet our requirements."
The central government said that with crude oil prices witnessing a global upsurge, domestic fuel prices have been under inflationary pressure
The reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, the government said. This will help the poor and middle class, while further pushing the overall economic cycle. Furthermore, the centre urged state governments to reduce Value Added Tax (VAT) levied on petrol and diesel to further bring relief to customers. Over the last 18 months, petrol prices have been hiked to Rs. 36 per litre, while diesel has gone up by about Rs. 27 per litre. In comparison, the reduction is only a marginal relief to consumers.
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Fuel prices have been touching record highs nearly every day this year. Prices have been on the rise for 28 of the last 36 days. In the national capital, petrol is priced at Rs. 110.04 per litre, while diesel costs Rs. 98.42 per litre. In Mumbai, petrol is priced at Rs. 115.85 per litre, and diesel sets you back by Rs. 106.62 per litre.
