Government slashes petrol excise duty by Rs 5 and diesel excise duty by Rs 10

This decision definitely comes as a relief to citizens as fuel prices for a while have been rising constantly on account of the excise tax and VAT imposed by the Union government and state governments

Image used for representational purpose. (Photo | S Senbagapandiyan, EPS) 

On the eve of Diwali, the Centre announced its decision to slash excise duty on petrol by Rs 5 and on diesel by Rs 10.

The government said these prices will come into effect from November 4 midnight.

"The reduction in excise duty on diesel will be double that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season," the government said in a press release.

This decision definitely comes as a relief to citizens as fuel prices for a while have been rising constantly on account of the excise tax and VAT imposed by the Union government and state governments.

The government saw it as a move that will boost the economy. 

"The reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes. Today’s decision is expected to further spur the overall economic cycle," the statement went on to note.

States were "also urged to commensurately reduce VAT on petrol and diesel to give relief to consumers".

Earlier today, one litre of petrol breached the Rs 110-mark on Tuesday in the national capital while the same was sold at Rs 115.85 in Mumbai. Fuel prices had become dearer by around Rs 8 a litre in October alone. 

The rate of 1 litre of petrol was hiked by 35 paise on Tuesday, though the price of diesel remained unchanged. With this fresh hike, the seventh in a row, petrol prices in Delhi were at a record high of Rs 110.04 per litre on Tuesday, while diesel was sold at Rs 98.42 per litre.

Among the four metros, fuel prices are the highest in the financial capital Mumbai, with 1 litre of petrol and diesel costing Rs 115.85 and Rs 106.62, respectively. In Chennai, petrol is at Rs 106.66 per litre, while diesel is available at Rs 102.59. In Kolkata, petrol and diesel are retailing at Rs 110.49 and Rs 101.56 per litre, respectively.