Govt cuts petrol, diesel prices by Rs 2.50; asks states to follow suit

Govt cuts petrol, diesel prices by Rs 2.50; asks states to follow suit
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New Delhi, Oct 4: The Centre on Thursday announced a cut of Rs 2.50 per litre on petrol and diesel prices with immediate effect.
Addressing a press conference, finance minister Arun Jaitley said the Union government is effecting a Rs 1.50 cut on excise duty on petrol and diesel. Furthermore, the government has asked oil marketing companies (OMCs) to absorb a deduction of Re 1 per litre on both the petro products, he said.
The reduced prices will be effective from midnight.
Soon after, the state governments of Gujarat and Maharashtra announced a further Rs 2.50 cut in fuel prices.
Jaitley also said that the central government will be writing to all state governments to reduce petrol and diesel prices by a further Rs 2.50 by cutting sales tax or value added tax (VAT).
The impact of excise duty cut to the Centre will be Rs 10,500 crore, Jaitley said.
Earlier in the day, the finance minister held an important meeting, attended by the petroleum minister and other key officials.
The finance minister aimed to soothe concerns on the economic front by citing that all the domestic indicators except for current account deficit (CAD) are strong, stable and encouraging.
Jaitley said the surge in petrol price is due to the Brent crude oil touching four-year high of $86 a barrel on Wednesday.
Shares in Indian Oil Corp, the country’s biggest oil refiner, dropped 11.4 per cent. Hindustan Petroleum Corp closed down 13.5 per cent while Bharat Petroleum Corp Ltd fell 12.4 per cent. Reliance Industries shares closed down 6.9 per cent, their biggest single-day fall since August 24, 2015.