Petrol and diesel will cost Rs 2 a litre less after the excise duty cut. Currently, a litre of petrol costs Rs 70.88 in Delhi, whereas the diesel is priced at an all-time high of Rs 59.14 per litre.
The slash in excise duty applicable on branded and unbranded petrol and diesel will result in a revenue loss of around Rs 13,000 crore in the remaining part of the current fiscal year.
The Indian fuel prices are linked to the international market, with the prices being revised daily. Taxes account for nearly half of the retail prices. Three years ago, the government raised the taxes when the crude oil prices crashed.
The Finance Ministry also stated that the rise in fuel prices also reflected in Wholesale Price Index-based inflation which increased to 3.24 percent in August as opposed to 1.88 percent in July.
A Finance Ministry official said, "The Government of India has decided to reduce the Basic Excise Duty rate on Petrol and Diesel (both branded and unbranded) by Rs 2 per litre with effect from 4th October 2017."
The government has finally put a brake on the increasing fuel prices in the country. The prices of petrol and diesel reached an all-time high since past three years. Now with the reduction in excise duty, the consumers can breathe a sigh of relief.