Centre cuts fuel prices by Rs 2.50/L, urges states to match it

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New Delhi: Finance Minister Arun Jaitley on Thursday announced a cumulative cut of Rs 2.50 per litre both on diesel and petrol and also laid down a three-point plan to bring fuel prices under control.

The major announcement comes after Jaitley met Petroleum Minister Dharmendra Pradhan to look at options to mitigate the impact of rising fuel prices on the country’s economy.

Briefing a press conference the finance minister said , “We are writing to the state governments that as the Central government is cutting Rs 2.50 on both petrol and diesel, they also do the same”. Besides, the oil marketing companies have been asked to absorb Re 1 per litre on petrol and diesel, taking relief to Rs 2.50 per litre.

Jaitley added that this would have only a marginal impact on the fiscal deficit — less than 0.05% of the fiscal deficit — since the excise duty cut will be balanced out by higher direct tax collections.

“It will be clear after this, which states mean what they write and actually implement the VAT cut,”  Jaitley said, adding that “those who don’t, the people will question them”.

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