Finance Minister Arun Jaitley today announced marginal relief for citizens from runaway fuel prices with excise duty cut of Rs 1.50 and another Re 1 drop by oil marketing companies, taking the cut in fuel prices to Rs 2.50.
He appealed to the states to match the centre’s effort by reducing value-added tax or VAT by Rs 2.50 so that the total benefit to citizens is at least Rs 5. Six BJP-ruled states — Uttar Pradesh, Gujarat, Maharashtra, Chhattisgarh, Assam and Tripura — responded by dropping fuel prices by Rs 2.50. Jharkhand has reduced diesel prices by Rs 2.50, but not of petrol.
All BJP-ruled states are expected to cut fuel prices by this evening, said sources.
The Congress, however, said the fuel cut was like band aid on a deep wound and called it a “panic reaction by the Modi government amid anger among people.”
“Giving a relief of Rs 1.50 is insignificant. It is like a needle in the haystack,” said Congress spokesperson Randeep Surjewala.
Mr Jaitley said crude oil touched four-year high of $86 a barrel on Wednesday and interest rates in the US have reached a seven-year high.
Following the announcement, the stocks of oil marketing firms such as Hindustan Petroleum, Indian Oil Corporation and Bharat Petroleum fell by over 18 per cent as they would be sharing the burden of the fuel price cut at a time when crude prices are high. (KNB/AGENCIES)