After excise duty cut, petrol, diesel prices dip in Hyderabad

Hyderabad: Petrol and diesel prices witnessed a significant fall after the central government cut the excise duty on fuel. The duty has been cut by Rs. 8 per liter on petrol whereas, Rs. 6 per liter on diesel.

After the duty cut, the petrol and diesel prices in Hyderabad have dropped from Rs. 119.49 to Rs. 109.66 per liter and from Rs. 105.49 to Rs. 97.82 per liter respectively.

State governments reduce VAT on petrol, diesel

While announcing the excise duty cut, Union Finance Minister Nirmala Sitharaman said, “I wish to exhort all state governments, especially the states where reduction wasn’t done during the last round (November 2021), to also implement a similar cut and give relief to the common man”.

Following the footstep of the central government, Rajasthan and Kerala announced a reduction in VAT on petrol and diesel.

While Rajasthan government reduced VAT by Rs 2.48 per liter on petrol and Rs. 1.16 per liter on diesel, Kerala decided to cut the tax on the prices of petrol and diesel by Rs 2.41 and Rs 1.36 respectively.

Why govt announced excise duty cut now?

The Consumer Price Index (CPI) inflation jumped from 6.95 percent in March 2022 to 7.79 percent in April 2022 which is above the RBI’s upper tolerance limit.

As the inflation is largely driven by fuel and food prices, the government reduced the excise duty to bring down the petrol and diesel prices.

Since fuel prices play a major role in the prices of commodities, the excise duty cut is expected to reduce the prices of goods.