While the Centre cut excise duty on petrol and diesel by Rs 1.50 per litre and asked oil firms to absorb Re 1 a litre of prices, BJP-ruled states including Gujarat, Maharashtra, Uttar Pradesh, Madhya Pradesh, Chattisgarh, Jharkhand, Assam and Tripura announced a cut in Value-Added Tax of up to Rs 2.5 per litre to effect a Rs 5 per litre reduction in pump rates.
Several states had announced reduction in fuel prices by cutting sales tax/VAT.
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 fuel prices were cut a day after centre's announcement.
What this means is that effectively, the prices of petrol and diesel will come down immediately by Rs 2.5 per litre.
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Jaitley, however, said asking oil companies to bear a part some burden is not going back on deregulation.
"The government's move is positive as it will placate prices and inflation, said rating agency Care".
The reduction in excise duty, only the second in four years of BJP-led NDA rule, will dent government revenues by Rs 10,500 crore and was aimed at cooling retail prices that had shot up to an all-time high. HPCL shares fell 14.7% to Rs 214.40, BPCL was down 17.08% at Rs 313 and Indian Oil dived 14.23% to Rs 134.95.
But. Overall Price Can Be Reduced By Rs 5 Per Litre..
The Finance Minister said, the prices of crude oil and domestic developments in the USA have impacted the economies across the world. The prices came down following Union Government's decision on Thursday to cut down the excise duty Monday fuel in the wake of falling rupee and increasing crude prices.
"Since May 2014, the Modi government has increased central excise duty 12 times. Kindly bring petrol and diesel under the purview of GST", he tweeted in Hindi. He said that Rs 10,500 crore will be the impact of the excise duty cut this year. It stands at Rs 15.33 per litre now. Any further revenue loss, however, could widen the fiscal deficit.