Government reduces exercise duty on petrol and diesel

The excise duty on petrol and diesel will be reduced by ₹ 5 and ₹ 10 respectively from today, that is, 4th November 2021. The government announced this on the eve of Diwali. It aimed to provide relief to people reeling under the impact of spiralling fuel prices. The sources said that “prices of petrol and diesel will come down accordingly,” sources said.

Government’s speech on reduction in prices of petrol and diesel

The reduction in excise duty on diesel will be double that of petrol. This will come as a boost to the farmers during the upcoming Rabi season,” the government said in an official statement. The Centre urged the states to reduce value-added tax (VAT) on both fuels. This will be done to give relief to consumers. The move came when the opposition regularly attacked the government on rising fuel prices.

What did Rahul Gandhi say about it?

On November 1, Congress leader Rahul Gandhi had tweeted while referring to petrol and diesel rates. He said that one should beware of “pickpockets”. “Beware of pickpockets,” he said in a tweet in Hindi, using the hashtag “#TaxExtortion“. Citing a news report along with his tweet, Mr Gandhi had said that petrol prices in some states have crossed ₹ 120 a litre. The centre had collected ₹ 2.3 lakh crore in 2018-19 and ₹ 2.58 lakh crore in 2017-18 in the name of fuel taxes. Meanwhile, the reduction in excise duty on fuel prices has been announced at a time when petrol and diesel prices were touching all-time highs across the country. It was crossing the ₹ 100 mark in all the major cities of the country, including the four metro cities. 

How had petrol and diesel prices gone up?

While petrol prices have crossed the ₹ 100 mark in all four metros, diesel prices have gone past the coveted mark in three metro cities. It is ₹ 98.42 per litre in the national capital, Delhi. Petrol prices have risen by about ₹ 34 per litre in two years and ₹ 26 in a year. Diesel prices have increased by ₹ 29.5 per litre in two years and ₹ 25 in a year.

How will the relief be a marginal one?

The relief will only be a marginal one, as excise duty on petrol will be reduced only by ₹ 5 per litre. Therefore, the petrol price will come down only to ₹ 105.69 per litre in Delhi, which is still at a high and way beyond the ₹ 100 mark. On Wednesday, petrol price in Delhi stood at ₹ 110.04 per litre while diesel was being sold for ₹ 98.42. In Mumbai, the petrol price was ₹ 115.85 while diesel stood at ₹ 106.62 per litre. For this reason shipping and packers and movers companies charges became quite high than previous time.

How is the public reacting to the fall in prices of petrol and diesel?

The general public is seeing the decision of the fall in prices as a Diwali sop to the burdened consumers. However, earlier this week, prices of LPG cylinders were hiked by oil marketing companies by ₹ 266, adding to the burden of the common man. Meanwhile, the government further said that a reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low. This will help the poor and middle classes. “Today’s decision is expected to further spur the overall economic cycle,” the official statement said.

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