In Delhi, where the fuel prices are the lowest among all metros and most state capitals, petrol is sold at Rs 84 a litre and diesel at Rs 75.45. The announcement was made by Finance Minister Arun Jaitely today. Of the Rs 2.5 cut, the Centre will bear Rs 1.5 of the burden and oil marketing companies will take a hit of Re 1 per litre. Jaitley further said that the ruling party and oil firms will deal with the price reduction by Rs 1.50 and Rs 1 respectively.
Soon after the announcement, several BJP-ruled states followed the suit and gave an overall relief of Rs 5 per litre.
"I am also writing to the states to make corresponding cuts in Value-Added Tax of equivalent amount so that consumers get Rs 5 relief in retail prices", he said.
Madhya Pradesh government has also chose to give an additional relief of ₹2.5/litre on Petrol and Diesel to give total benefit of ₹5/litre in the state, tweeted Madhya Pradesh CM Shivraj Singh Chouhan.
The Congress leader dubbed as "lies" Jaitley's claim that the tax base has risen under the NDA government and said the buoyancy in taxes is due to money collected through rise in excise duty on petrol and diesel in the last 52 months. Surjewala asked why the "fuel robbery continued when the prices of crude oil reduced by 45 per cent internationally".
"The government's capacity to provide relief is only when domestic factors are strong", he said.
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.
Except the Current Account Deficit (CAD), which is directly linked to oil prices, all other data are encouraging, he said.
Indian Oil Corporation (IOC), the country's largest fuel retailer, hiked the price of diesel and petrol by 21 paise and 14 paise respectively on Thursday. Kerala Finance Minister Thomas Isaac also announced that the government will not reduce prices at the state level. If the Centre is serious, it should reduce the tax to what it was when it assumed office.