New Delhi: Key BJP ruled states have announced to reduce fuel prices following the central government's announcement to cut the excise duty on petrol and diesel by Rs 2.50.
Concerned over the spike in fuel prices, finance minister Arun Jaitley on Thursday announced excise duty cut on petrol and diesel by Rs 1.50 per litre adding that Oil Marketing Companies (OMCs) will absorb Re 1 per litre on fuel.
Jaitley had also urged the states to reduce the taxes by an additional Rs 2.50 per litre thus bringing the effective reduction to Rs 5 per litre on fuel prices.
Following states have decided to cut prices of diesel and petrol by additional Rs 2.50. However, Maharashtra has decided to reduce only the price of petrol by Rs 2.50 per litre.
- Uttar Pradesh
- Madhya Pradesh
- Himachal Pradesh
- Jammu & Kashmir
- Arunachal Pradesh
States like Karnataka and Kerala have said that they will not be cutting state-imposed taxes on petrol and diesel because they had already reduced fuel prices by Rs 2 per litre last month.
Almost half of the fuel price is made up of taxes. The centre levies excise duty on petrol and diesel. On top of this, states levy value added tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 percent sales tax is charged on both the fuels.
Mumbai has the highest VAT on petrol, while Telangana levies the highest on diesel.
The central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by Rs 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
Since mid-August, the petrol price has risen by Rs 6.86 a litre and diesel by Rs 6.73 - the most in any six-week duration after the daily price revision was introduced in mid-June last year.
With PTI Inputs