Fuel prices on the boil again, diesel breaches Rs 80 in Mumbai

Arun Jaitley,Fuel price hike,Finance minister

The cut in fuel prices will cost the exchequer Rs 10,500 for the remaining half of this financial year

Finance Minister Arun Jaitley today laid down a three-point plan to bring petrol and diesel prices under control.

Mr. Jaitley said he would write to all the States on Thursday itself urging them to match the ₹2.5 cut with an equivalent cut in their respective Value-Added Tax rates on fuel.

Uttar Pradesh also reduced the fuel price by Rs 2.5 per litre giving a relief to consumers.

In Delhi, where the fuel prices are the lowest among all metros and most state capitals, petrol was being sold at Rs 84 per litre and diesel at Rs 75.45 on Thursday morning. "Maharashtra Government also chose to give additional relief of Rs 2.5/litre on Petrol to give total benefit of Rs 5/litre in the State of Maharashtra", Fadnavis tweeted. "The central and state government are working together to give more and more relief to the people", he told ANI. The centre levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. "Since this is for half year, the impact will be Rs 10,500 crore which is only 0.05 percent of the fiscal deficit", he said.

While the decisions by the BJP-ruled states was expected, there was also a near immediate refusal by non-BJP states to cut fuel rates.

Rupee hits record low as fuel prices touch fresh highs
The rupee opened the day's trade at the Inter-Bank Foreign Exchange Market at 73.67 to a dollar from its previous close of 73.34. Gandhi Wednesday hit out at Prime Minister Narendra Modi questioning his silence over the falling value of the Indian Rupee.

Minister of State for Finance Shiv Pratap Shukla on Wednesday said Prime Minister Narendra Modi is chalking out plans to reduce the skyrocketing fuel prices.

Additionally, oil companies are to be asked to absorb another Re 1 per litre. "Consequently, we are hoping for a Rs 5 per litre reduction", the finance minister said.

"As you know, brent oil has crossed $86 a barrel, the higher it has been in the last four years", Mr. Jaitley said at a press conference.

Apart from this, the oil marketing companies in India have been asked to bear the remaining burden of Re 1 per every litre and with this, the customers will get a relief of Rs 2.50 per litre on both petrol and diesel. "We are happy to reduce prices of fuel as much as announced by the Centre", Kesarkar said. Consistent dollar demand from importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure.

In Mumbai, petrol is being retailed at Rs 91.32 a litre and diesel at Rs 80.10 per litre after being hiked by 14 paise and 21 paise, respectively.

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