Central Government Announces Excise Duty Cut On Fuel

In a major relief to citizens, the central government reduced the excise duty on petrol and diesel by Rs. 8 and Rs. 6 per litre respectively. Finance Minister Nirmala Sitharaman said that the central excise duty reduction will reduce the retail price of petrol by Rs. 9.5 per litre and diesel by Rs. 7 per litre. Despite the reduced fuel prices, petrol and diesel are still costlier than it was two months ago. Few state governments including Maharashtra, Kerala and Rajasthan followed the centre’s announcement and additionally announced VAT reductions on petrol and diesel. The Maharashtra state government reduced the VAT on petrol by Rs. 2.08 per litre and that on diesel by Rs. 1.44 per litre. Meanwhile, Kerala and Rajasthan reduced the VAT on petrol by Rs. 2.41 per litre and Rs. 1.36 per litre for diesel. However, state governments iterated that the central excise duty reduction was not enough and more needed to be done to bring prices in check. Fuel prices have been on a rampant rise since March this year since prices were last reduced for Diwali in 2021.