Excise duty on petrol, diesel cut by Rs 2/L; Govt may suffer Rs 26k-cr loss
Facing public resentment over the recent spike in fuel prices, the government on Tuesday cut the excise duty on both branded and unbranded petrol and diesel by Rs 2 a litre from Wednesday. According to sources, the finance was initially reluctant to reduce the duty due to revenue concerns, but relented after discussions with the petroleum ministry on implementing steps to bring down petrol prices to Rs 60-65 a litre. While this would hit the revenues of the exchequer by Rs 13,000 crore in the second half of the current financial year at a time when the fiscal deficit has already touched 96 per cent of the Budget Estimates, consumers will get relief as the move would reduce the consumer price index (CPI)-based inflation rate by 9 basis points as a first round impact.