In a major yet marginal relief for the consumers, the Narendra Modi led-BJP government reduced the excise duty on petrol and diesel by Rs 2.50 on Thursday, October 4.
Meanwhile, Maharashtra, Gujarat Government also made a decision to give additional relief of ₹2.5/litre on Petrol to give total benefit of ₹5/litre in the State.
Prime Minister Narendra Modi's ruling Bharatiya Janata Party is facing a tough election in three key states this year, followed by a national election which is due by May. "Each and every state has their own situation [sic], so first, let the letter come".
Surjewala said the government must also answer to the people for hiking central excise duty on 12 occasions, raising the central excise on petrol by 211 pc and on diesel by 443 pc.More news: Flake calls Trump's comments on Ford 'appalling'
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Petrol in Mumbai will now be available at Rs 86.34 per litre while in Ahmedabad, it will be available for Rs 78.21 per litre. Jaitley said the decision to give relief to consumers was necessitated by the uncertainty regarding the worldwide oil prices and was made possible by better-than-expected revenue collections. "There should be a substantial reduction".
The Congress leader also questioned why the government was selling petrol and diesel "cheaper" to 29 countries.
He said the reduction in fuel price wasn't bad economics.
The cut, which comes ahead of assembly elections in five states - Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram, will cost the exchequer Rs 10,500 for the remaining half of this financial year.
While some states like Andhra Pradesh and Karnataka cut the fuel prices weeks ago by announcing a cut to the Value-Added Tax charged by the states, Tamil Nadu, Telangana and Kerala had maintained that it was up to the Central government to reduce the prices. This is an act of fraud.
The states have reduced the sales tax and VAT charged on diesel and petrol.
Maharashtra chief minister Devendra Fadnavis said that his government also decided to make a matching cut as this would be a "great relief" to the people.