Centre announces massive cuts on petrol, diesel excise duty on Diwali eve

The government has decided to reduce the central excise duty of ₹5 on petrol and ₹10 on diesel, according to people familiar with the matter.

In a move to provide a fillip to the economy, the Central government has taken a decision to make significant cuts in excise duty on petrol and diesel starting tomorrow. On the eve of Diwali, the government decided to reduce the central excise duty of ₹5 on petrol and ₹10 on diesel, according to people familiar with the matter. The prices of fuel and diesel will come down accordingly across the country.

The reduction in excise duty is expected to boost consumption and keep inflation low in a bid to help the poor and middle classes.

The reduction in excise duty is expected to boost consumption and keep inflation low in a bid to help the poor and middle classes. The price cuts are also expected to boost economic activities across sectors - manufacturing, services or agriculture.

“Today’s decision is expected to further spur the overall economic cycle,” the government said in a statement, urging states to reduce VAT on petrol and diesel to give relief to consumers.

The government lauded the hard work of farmers during the coronavirus disease (Covid-19) pandemic which kept the economic growth momentum even during the nationwide lockdown. It said that the decision to reduce the excise duty on petrol and diesel will come as a “boost to the farmers during the upcoming Rabi season”.

The global crude oil prices have witnessed a massive upsurge in recent months which caused a price rise of petrol and diesel in India.

Amid massive price rise in crude oil globally, the world has also been witnessing a shortage of all forms of energy, especially coal. The government on Thursday said that it has made efforts to ensure that “there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet our requirements.”