New Delhi: After the Centre reduced taxes on petrol and diesel on Wednesday evening, the revision has come into effect. On Thursday, petrol was valued at Rs 103.80 while diesel was recorded at Rs 91.59 in Kochi.
The excise duty on petrol had been reduced by Rs 5 ($0.0671) per litre. With an additional Rs 1.30 (30.08% value-added tax (VAT) charged by the state) also being reduced, petrol has become cheaper by Rs 6.30.
For diesel, in addition to the announced reduction of Rs 10 ($0.1342) per litre, Rs 2.27 that was VAT has also been reduced.
The tax relief comes on the eve of the Hindu festival of Diwali, which marks the beginning of a busy festive season in India, typically marked by increased consumer spending.
The state governments had argued that instead of including fuel prices in GST, the Centre must lower taxes. In states ruled by the BJP - Assam, Tripura, Goa, Karnataka, Manipur and Sikkim - fuel prices were slashed by Rs 7.
The federal government will face a revenue loss of between 550 billion rupees ($7.38 billion) and 600 billion rupees from the cut in taxes, according to government sources.
"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 Ministry of Finance said in a press release.
India, the world's third-biggest oil importer and consumer, ships in about 85% of its oil needs from overseas. Spiking global oil prices had pushed up the retail prices of petrol and diesel in India to a record high this month.
Global oil prices had surged to $86.40 a barrel on Oct. 26 -- the highest since Oct. 2014 -- battered by the hit to economies from the COVID-19 pandemic, although they since eased to about $82.5 per barrel.
(With agency inputs)
