Oil Minister Dharmendra Pradhan meets Jaitley as fuel prices touch new high
- by Claude Bryan
- in Markets
- — Oct 4, 2018
Reactions to the central government's decision to reduce fuel prices by Rs 2.50 on Thursday ranged from adulatory to dismissive ones.
India is cutting prices of petrol and diesel by 2.50 rupees ($0.03) a litre, Finance Minister Arun Jaitley said on Thursday, the government's latest step to tackle the impact of a sharp rise in crude oil prices and a weak local currency.
He also asked state governments to follow suit and cut taxes by a similar amount.
In the National Capital Region (NCR), petrol is being sold at Rs 84 per litre, diesel is being sold at Rs 75.45 per litre.
Speaking on the reason for price cut, the Finance Minister said that there has been a significant impact of higher interest rates in the United States and crude oil prices on rising fuel prices in the country.
Finance Minister Arun Jaitley announced a cut of R s 2.50 percent in fuel prices. "The cut makes petrol and diesel prices cheaper by Rs 5 in the state".
The major announcement comes after Jaitley met Oil Minister Dharmendra Pradhan to look at options to mitigate the impact of hiking fuel prices on the economy. The strong USA economy added with the mighty dollar has widened the current account deficit of India and it has also impacted significantly on the emerging markets across the globe.
Key Republicans criticise Trump for 'appalling' mockery of Kavanaugh accuser
Jeff Flake , R-Ariz., said that ridiculing "something this sensitive at a political rally is just not right". Alaska Senator Lisa Murkowski called the remarks "wholly inappropriate and in my view unacceptable".
The Uttar Pradesh government also reduced the price.
Also, the rupee dropped to its lowest ever level of 73.77 against the dollar, resulting in expensive crude imports.
Devendra Kumar Pant, chief economist at India Ratings and Research, said the move could act as a "minor comforting factor" for the central bank during its monetary policy meeting scheduled on Friday, as a fuel price cut will ease retail inflation.
The Congress, however, hit out at the Narendra Modi government over what it described as a "meagre" reduction in excise duty on petrol and diesel. "Each and every state has their own situation so first let the letter come", he said. The hike in duties had led to excise collections from petro goods more than doubling in last four years - from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18.
The states have reduced the sales tax and VAT charged on diesel and petrol.
Maharashtra charges the highest sales tax and VAT on petrol at 39.12 per cent. States saw their Value-Added Tax revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18.
