Finance Minister appealed state governments to reduce VAT rates on petrol and diesel. (File Photo/PTI)
Finance Minister Arun Jaitley on Thursday announced a cut of Rs 1.50 in excise duty for petrol and diesel. Jaitley said that the oil companies would further cut the fuel rates by Re 1, which means that petrol and diesel are set to get cheaper by Rs 2.50. The new rates will be applicable from midnight. The rate cut comes after PM Narendra Modi took up the issue of sky rocketing fuel prices with Finance Minister Arun Jaitley, who then discussed ways to lessen the burden on the common man.
Addressing a press conference in New Delhi, Arun Jaitley appealed state governments to follow suit and reduce VAT on petroleum products. He said if states decrease VAT by Rs 2.50, the fuel rates could go down by at least Rs 5. Soon after FM Jaitley's appeal, Uttar Pradesh, Gujarat, Maharashtra, Tripura, Jharkhand, Madhya Pradesh, Chhattisgarh, Jammu and Kashmir, Himachal Pradesh and Haryana announced to decrease VAT on petrol, diesel by Rs 2.50.
Jaitley had met Oil Minister Dharmendra Pradhan to look at options to cut fuel prices.
After centre's decision, Haryana government also decided to give an additional relief of Rs 2.5/litre on petrol and diesel to give total benefit of Rs 5/litre in the state.
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The two ministers met on Wednesday evening amid concerns of high fuel prices adding to farmers' distress, particularly in the upcoming Rabi crops season.
Diesel, which is being sold at record high prices, is the most used fuel in the farm sector. Tractors tilling the soil to irrigation pump sets - all use diesel, and a spike in its prices is bound to add to the cost cost of farming.
Petrol prices were Thursday hiked by 15 paise a litre and diesel by 20 paise, according to price notification of state-owned oil firms.
The hike pushed petrol price in Delhi to an all-time high of Rs 84 per litre and diesel to Rs 75.45.
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