Govt Reduces Excise Duty on Petrol by Rs 8 per Litre, Diesel by Rs 6; PM Says 'It's Always People First for Us'

Under pressure, the central government on Friday cut excise duty on petrol by a record Rs 8 per litre and that on diesel by Rs 6 per litre, which will lead to a welcome drop in fuel prices. The cut will translate into a reduction of Rs 9.5 per litre in petrol prices and Rs 7 per litre in diesel, after taking into account its impact on other levies. Tweeting “people first for us”, Prime Minister Narendra Modi said the announcements will bring relief to citizens and “further ease of living”.

“It is always people first for us! Today’s decisions, especially the one relating to a significant drop in petrol and diesel prices will positively impact various sectors, provide relief to our citizens and further ‘Ease of Living.’” PM Modi said on Twitter.

Finance minister Nirmala Sitharaman made the announcement through a series of tweets, where she mentioned that the Narendra Modi-led government was committed to the welfare of the poor since it assumed office. “We are reducing the central excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre. This will reduce the price of petrol by Rs 9.5 per litre and of diesel by Rs 7 per litre,” she said, adding that this will have a revenue implication of close to Rs 1 lakh crore per year for the central government.

Consumers have been battered by high fuel prices that have pushed inflation to a multi-year high. From Sunday, petrol in Delhi will cost Rs 95.91 a litre as against Rs 105.41 per litre currently. Diesel, meanwhile, will cost Rs 89.67 a litre as opposed to Rs 96.67 a litre. Increase in fuel prices were necessitated due to surge in international oil prices.

Subsidy for Ujjwala beneficiaries

Also, under the Ujjwala Yojana scheme, the Centre will give a subsidy of Rs 200 per cylinder for 12 cylinders a year. This is being done to ease some of the burden arising from record rise in rates of cooking gas. A 14.2-kg LPG cylinder costs Rs 1,003 in the national capital. Beneficiaries of Pradhan Mantri Ujjwala Yojana, the poor women who got free connections, will get Rs 200 subsidy directly in their bank accounts and the effective price for them would be Rs 803 per 14.2-kg cylinder.

Sitharaman said disruptions in supply chains caused by the Ukraine conflict as well as the world’s recovery from the Covid-19 pandemic were being taken into account. She said both had led to inflation and economic distress in numerous countries. Hence, she added, keeping in view the “challenging international situation” the Centre was committed to keep the prices of essential items under control.

“We’ve taken a number of steps to help the poor and the middle class. As a result, the average inflation during our tenure has remained lower than during previous governments,” Sitharaman said, adding that the Prime Minister’s Office had specifically asked all arms of the government to work with sensitivity and bring relief to citizens. So, she said, the government was announcing more steps to help people.

‘Exhort states to cut local sales tax or VAT’

She exhorted all state governments to cut local sales tax or VAT. “I wish to exhort all state governments, especially the states where reduction wasn’t done during the last round (November 2021), to also implement a similar cut and give relief to the common man,” she added.

The finance minister said despite rising fertiliser prices globally, the government has protected farmers from such price hikes. “In addition to the fertiliser subsidy of Rs 1.05 lakh crore in the budget (for current fiscal), an additional amount of Rs 1.10 lakh crore is being provided to further cushion our farmers,” she said.

“We are also reducing the customs duty on raw materials and intermediaries for plastic products where our import dependence is high. This will result in reduction of cost of final products,” she said.

She further said customs duty on raw material as well as intermediaries for iron and steel are being calibrated to reduce prices. Import duty on some raw materials of steel will be reduced, she added.

“Export duty on some steel products will be levied. Measures are being taken up to improve the availability of cement and through better logistics to reduce the cost of cement,” Sitharaman said.

Kerala announces cut in state tax

After Sitharaman’s announcement, Kerala government announced cut in state tax on petrol and diesel. State finance minister KN Balagopal said there will now be a reduction of Rs 2.41 on petrol and Rs 1.36 on diesel.

Uttarakhand chief minister Pushkar Singh Dhami, meanwhile, said the state had already reduced VAT on fuel prices.

“I want to thank PM Modi for giving direct relief to the public. We had earlier reduced VAT on fuel prices. Common people will be benefited and will help in reducing inflation,” Dhami said on the reduction of central excise duty on petrol and diesel.

‘Working towards ‘garib kalyan’

Home minister Amit Shah, foreign minister S Jaishankar, BJP national president JP Nadda, Uttar Pradesh chief minister Yogi Adityanath were among major BJP leaders who hailed the announcement to cut central excise duty on fuel. They said the PM Modi-led government “cares for the common man and works towards garib kalyan“. All the leaders thanked PM Modi for bringing relief to citizens.

Hailing both PM Modi and Sitharaman, Shah tweeted: “Modi ji is a sensitive leader who cares for every section of the country. Therefore, for the last 8 years, the concern of the interests of the poor, farmers and general public of the country has always been at the center of the decisions of the Modi government.” (sic)

He added: “Even in this challenging global situation, under the leadership of PM @narendramodi ji, the central government has given a huge relief to the general public by reducing the excise duty on petrol and diesel and giving a subsidy of ₹200 on gas cylinders. For other sectors also, many such steps have been taken, which will reduce the price of the products.” (sic)

Nadda, meanwhile, expressed his gratitude to PM Modi and Sitharaman for the “public-friendly” decision. “Many thanks to Hon. PM @narendramodi Ji as he has proven how committed he is to the welfare of the common man once again today, as the excise duty on Petrol by Rs.8/litre and on Diesel by Rs.6/litre has been slashed, ensuring benefit to everyone. #PetrolDieselPrice.” (sic)

Health minister Dr Mansukh Mandaviya and Jaishankar said the Centre was responding in an effective manner to benefit all sections of society. Mandaviya tweeted: “Thanking PM @NarendraModi Ji for measures to provide relief to common people. Announcements made by FM @NSitharaman ji will benefit all the sections of society. Ours is a Govt that always works for the people & cares for them. Modi Govt is protecting Annadatas from huge surge in global fertilizers prices. In addition to the fertilizer subsidy of ₹ 1.05 lakh crore in the budget, an additional amount of ₹ 1.10 lakh crore is being provided to ensure the availability of affordable fertilizers.” (sic)

Jaishankar, meanwhile, said, “Steps relating to fertilizers, fuel, cooking gas, raw materials, intermediaries, iron & steel and cement, all have a single objective. It is to put people first and take care of the common man, workers, farmers and their families. Applaud the measures announced by Finance Minister @nsitharaman to address the difficult economic situation created by the Covid19 pandemic and the Ukraine conflict. All countries, in all geographies are struggling with a similar challenge.” (sic)

Adityanath said it was a massive move to benefit “mothers and sisters”. “Under the leadership of the respected Prime Minister, the Central Government has today decided to give a subsidy of ₹ 200 per gas cylinder (up to 12 cylinders) this year to more than 9 crore beneficiaries of Pradhan Mantri Ujjwala Yojana. Heartfelt thanks Prime Minister for this decision providing support to mothers and sisters!” he added. (sic)

Union minister Piyush Goyal said “Modi sarkar is listening”. “Thank you PM @narendramodi ji for the slew of measures to bring relief to all sections of the society. Central excise duty cut on Petrol & Diesel is a major step towards easing prices. Gas cylinder subsidy to over 9 crore Ujjwala Yojana beneficiaries will bring a smile on the faces of our mothers and sisters. The steps announced by FM @nsitharaman ji truly empowers the common man,” he said. (sic)

Former Maharashtra CM Devendra Fadnavis tweeted: “Big : Petrol to reduce by ₹9.5/litre & Diesel by ₹7/litre. Thank you Hon PM @narendramodi ji & Union FM @nsitharaman ji for reducing central excise duty by ₹8/litre on petrol & ₹6/litre on diesel. Union Government to share ₹1 lakh crore burden every year. #PetrolDieselPrice” (sic)

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