Maharashtra, Gujarat cut fuel prices by Rs 2.50; Kerala, Karnataka refuse

Maharashtra, Gujarat cut fuel prices by Rs 2.50; Kerala, Karnataka refuse

Maharashtra, Gujarat cut fuel prices by Rs 2.50; Kerala, Karnataka refuse

Social media has seen reproduction of Modi's pre-2014 election speeches, where he had slammed the UPA government for increase in petrol and diesel prices and falling rupee.

Kerala Finance Minister Thomas Isaac on Thursday refused to reduce Value Added Tax (VAT) by Rs 2.50 on petrol and diesel in the southern state as per the Centre's request so as to give relief to the people.

Gujarat government also made a decision to reduce petrol, diesel prices by Rs 2.5 per litre.

This reduction in petrol prices was needed, as Maharashtra recently breached Rs 90 per litre mark, and speculations were rife that the price of petrol will soon touch Rs 100. Diesel is priced at Rs 80.10 per litre in the city.

The Finance Minister said, however, that the higher oil prices were not the only factor that prompted the decision: India was also getting hit by higher US interest rates, although he added that only the country's current account deficit was swelling under the twin pressure of prices and rates, while the national fiscal deficit was enjoying the positive effects from direct tax collection rates.

To curb the skyrocketing fuel prices, Finance Minister Arun Jaitley on Thursday announced a cut of Rs 2.5 in the prices of both petrol and diesel. The state government has chose to reduce the value added tax (VAT) on petrol and diesel to effect a Rs 2.50 per litre reduction in fuel prices in order to facilitate the general public, he was quoted as saying in a report by IANS.

Karnataka and Kerala have said that they will not be cutting state-imposed taxes on petrol and diesel.

West Bengal Chief Minister Mamata Banerjee also hit out at the Centre for asking the states to reduce taxes and demanded a rollback of the Rs 10 cess it levied on fuel.

The reduction in excise duty, only the second in four years of BJP-led NDA rule, is expected to dent the government revenues by Rs 10,500 crore. As a measure to curb the growing menace, the government has finally stepped in by trimming down the excise duty on fuel prices to bring in relief to the end users. "Centre's revenue collection is intact due to expansion of tax base not due to rate hike".

Brent oil on Wednesday crossed $86 per barrel, which is the highest in the last four years, and rising interest rates in the USA have a significant impact across global markets, said Jaitley. "We cannot do it at the cost of financial position and give it when it can absorb it".

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