Assam Finance Minister Himanta Biswa Sarma, on Thursday announced a total cut of Rs. 5, on petrol and diesel in Assam thereby bringing down the price for petrol to Rs. 81.50 a litre and that of diesel to Rs. 73.91 a litre.
The cut includes a reduction in excise duty of 1.50 rupees per litre, which will reduce government revenue by 105 billion rupees, Jaitley said.
He also noted that the oil marketing companies are fully competent to deal with the decision and the government was not going back on fuel price deregulation.
While the states reduced Value-Added Tax by Rs 2.50 a litre, the effective benefit varies because of a difference in logistics and other costs.
The price cuts would be effective from midnight tonight.
After the minister's announcement, may states including Jharkhand, Gujarat and Chhattisgarh too announced a reduction in fuel prices. In a post on Facebook, Mr Jaitley linked the weakening rupee and widening current account deficit or CAD to high worldwide price of crude oil. Petrol Price Hits Rs 84 in Delhi, Diesel Costs Rs 80 in Mumbai as Fuel Rates Continue to Soar.
The decisions were taken at a meeting chaired by Prime Minister Narendra Modi to review the prevailing economic issues.
Jammu and Kashmir: Petrol and Diesel prices in Jammu and Kashmir have been slashed by Rs 5 per litre, the state government.
This is the second time in one year that the Centre has cut excise duty on petrol and diesel as rising prices pinch the common man.
The Government will request state governments to cut down, he said.
Jaitley said the move followed Brent crude oil touching four-year high of United States dollars 86 a barrel Wednesday and interest rates in U.S. reaching seven-year high. But with a weakening rupee, it will likely have fewer options in the form of import-related tax cuts. "So the impact will be Rs 10,500 crore in current fiscal which is only 0.05 per cent of fiscal deficit".