After facing constant criticism from the opposition over the rising prices of diesel and petrol, the Central Government on Tuesday announced a reduction of the basic excise duty on petrol and diesel by Rs 2 per litre, effective Wednesday (Today). Since the National Democratic Alliance (NDA) came to power, 2014, the petrol and diesel prices have been raised at least 11 times. According to reports, the excise duty on petrol and diesel was Rs 9.48 and Rs 3.56 per litre respectively before the NDA government took office, which has gone up to Rs 21.48 and Rs 17.33 a litre, respectively, posting a significant increase of 226 percent and 486 percent, respectively, over the May 2014 level.
Even though the reduced diesel prices and petrol prices, which are effective from today, come as a good move to the commuters, however, the reports claims that move could render the exchequer poorer by Rs 13,000 cr.
Recently the Union Finance Minister Arun Jaitley ruled out the possibility of Centre cutting down on taxes on petrol and diesel, stressing that the states should reduce the Value Added Tax (VAT) on petrol and diesel prices. Claiming that the Centre needs funds for the infrastructural projects Arun Jaitley said, “We need excise revenues to push public investment, and if any state wants to reduce excise they can do so.”
“The revenue loss on account of these reductions in excise duty is about Rs 26,000 crore in a full year, and about Rs 3000 crore during the remaining part of the current financial year,” he added.
Meanwhile, an order from the Finance Ministry announced a reduction of Rs 2 per liter in prices of diesel and petrol effective from Wednesday. On Tuesday, a senior Finance Ministry official said that the Central government will nudge states to also reduce Value Added Tax (VAT) on petrol and diesel.
Going by the statistics of October 2, the petrol and diesel prices in Delhi, itself had surged to Rs 70.83 per liter and Rs 59.07 per litre respectively, causing a huge hole in the pockets the commuters.
An official from Finance Ministry said, “The Government of India has decided to reduce the Basic Excise Duty rate on Petrol and Diesel (both branded and unbranded) by Rs 2 per litre with effect from 4th October, 2017. This decision 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.”
Even though the Centre aims to please the people with this move, they are now forced to look for an alternative apart from petrol and diesel.