The Government of India has reduced the basic excise duty rate on petrol and diesel (both branded and unbranded) by Rs 2 per litre.
The announcement, which was made by the finance ministry on Twitter, will take effect on October 4.
The finance ministry also said that the move has been done to cushion the impact of rising international prices of crude petroleum oil and petrol and diesel on their retail sale prices.
"Revenue loss on a/c of these reductions in excise duty is about Rs. 26,000 crore in full year and Rs 13,000 crore in remaining part of the current financial year. This decision has also been taken by the Government of India in order to protect the interest of common man," the ministry tweeted.
Earlier due to the increase in the international prices of Petrol and Diesel, during the last few weeks, the Retail Selling Prices (RSP) of Petrol and Diesel at Delhi have risen to Rs. 70.83/litre and Rs. 59.07/litre respectively, as on 2nd October 2017.
This rise in the prices of Petrol and Diesel is also reflected in WPI inflation, which has increased to 3.24% for the month of August 2017, as compared to 1.88% for the month of July 2017.This also prompted the Government to act swiftly in this regard.
In September, petrol prices had reached an all-time high. Union minister for petrol Dharmendra Pradhan ruled out government intervention to disrupt the daily revision in petrol and diesel prices despite Rs 7.3 per litre spike in rates since July, saying the reform will continue.
He however remained non-committal on cutting taxes to soften the blow of relentless rise in prices since July 3, the government need to finance huge infrastructure and social projects has to be balanced with consumer needs.
Terming the criticism of spike in rates as unfair, he said the drop-in prices for over a fortnight after the daily price revision was introduced on June 16 has been ignored and only "temporary" phenomenon of rising trend is being highlighted.
