Fuel Prices Cut, Subsidy On Gas Cylinders: Centre's Big Move vs Inflation

Nirmala Sitharaman exhorted states to implement a similar cut and pass on the benefit to the common man.

Finance Minister Nirmala Sitharaman said various steps have been taken to cushion the poor

New Delhi:

The price of petrol will come down by Rs 9.5, while the diesel will be cheaper by Rs 7 as Finance Minister Nirmala Sitharaman announced a sharp cut in central excise duty on fuel prices amid surging inflation.

The central excise duty on petrol has been cut by Rs 8 per litre and the same on diesel has been cut by Rs 6 per litre, said Ms Sitharaman. The government says it will lose Rs 1 lakh crore by taking the cut on central excise duties.

The Minister urged states to implement a similar cut and pass on the benefit to the common man.

"I wish to exhort all state governments, especially the states where reduction wasn't done during the last round (November 2021), to also implement a similar cut and give relief to the common man," appealed Ms Sitharaman.

Petrol price in Delhi will from Sunday cost Rs 95.91 a litre as against Rs 105.41 a litre currently, while diesel will cost Rs 89.67 a litre as opposed to Rs 96.67 a litre now.

After the latest excise cut, the incidence of central tax on petrol will come down to Rs 19.9 a litre and that on diesel to Rs 15.8 per litre.

Also, the government will give Rs 200 per cylinder subsidy to Ujjwala Yojana beneficiaries for 12 cylinders in a year to help ease some of the burden arising from cooking gas rates rising to record levels.

"This will help our mothers and sisters," tweeted Ms Sitharaman.

The Finance Minister said the gas cylinder subsidy will have a "revenue implication of around Rs 6,100 crore."

Defending the government amid steep price rise, the Minister said steps have been taken to cushion the poor.

"We've taken a number of steps to help the poor and middle class. As a result, the average inflation during our tenure has remained lower than during previous governments," she said.

Soon after the cuts were announced, Prime Minister Narendra Modi underlined that it is "always people first for us" and that the it will further the "ease of living".

A similar cut in central duties took place November last year, recalled Oil Minister Hardeep Puri.

"This decision follows Nov '21 central excise cut of Rs 5 on Petrol & Rs 10 on Diesel. It underlines PM Modi Ji's unwavering commitment to concerns of citizens & showcases PM's leadership in crisis, despite refusal by some states to reduce prices & extraordinary supply constraints," tweeted Oil Minister Hardeep Puri.

Presently, petrol is selling at over Rs 100 in most parts of the country. The rates vary across states due to the value-added tax (VAT).

India is heavily dependent on imports to meet its oil needs and the domestic petrol and diesel prices are linked to international rates.

April saw India's wholesale and consumer prices accelerate at their fastest in years, prompting the central bank to hike interest rates at an unscheduled policy meeting this month.

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