The government announced on Wednesday that it would be reducing central excise duty on petrol and diesel by Rs 5 and Rs 10 respectively, effective November 4. It added that the idea behind reducing the excise duty is to give a fillip to the economy which is recovering the ravages of the pandemic.
"The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season," read a government statement issued on Wednesday evening.
The statement attributed the domestic surge in petrol and diesel prices in recent months to the spike in crude oil prices globally. It added that in recent weeks, this has exerted inflationary pressure on the overall economy.
India depends on oil imports to meet about 85 per cent of its domestic oil needs. Therefore, the international prices of crude oil have a significant bearing on the economy.
Further, the government asked states to look into reducing value-added taxes on petrol and diesel to extend further relief to consumers.
Petrol and diesel have scaled multiple record-highs in the previous month. On Wednesday, petrol in Delhi was sold at Rs 110.04 for every litre and Rs 115.85 per litre in Mumbai. Diesel in the national capital was being sold at Rs 98.42 per litre and Rs 106.62 per litre in Mumbai.
|City||Petrol (Rs/litre)||Diesel (Rs/litre)|
|Source: Indian Oil Corporation
Prices differ from state to state depending on the incidence of local taxes.