Petrol, Diesel cheaper by Rs 5 from midnight

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Welcoming the decision of the Central government, Haryana Finance Minister Abhimanyu said the Haryana government has also chose to reduce Value Added Tax (VAT) on petrol and diesel by about Rs 2.50 per litre, reported IANS.

In a press conference organised on Thursday afternoon, finance minister Arun Jaitley announced cuts in the Centre's excise duty on petrol and diesel by Rs 1.50 per litre while promising that the Central government would work towards effective relief of Rs 5 per litre. Gujarat government reduced petrol and diesel prices by Rs 2.50 per litre, while Maharashtra lowered petrol price by 2.50 per litre.

"The government's aim is to give relief to the consumer by increasing their purchasing power without impacting the fiscal deficit", he said.

Rising petrol and diesel fuel prices have been a cause of public anger, with people in parts of the country blocking trains and vandalising vehicles in protest. This has brought down the prices of petrol and diesel by Rs 2.5 per litre. The Gujarat Chief Minister tweeted that it has matched the central government's reduction, and that petrol and diesel are now cheaper by Rs 5 per litre.

The central government had incrementally taxed the fuels when the global crude prices had hit an all-time low to generate revenues for the state in order to rein in the fiscal deficit. He also said he would write to all the states to cut their respective taxes.

Brent oil on Wednesday crossed $86 per barrel, which is the highest in the last four years, and rising interest rates in the U.S. have a significant impact across global markets, said Jaitley.

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The Finance Minister expressed confidence about meeting the fiscal deficit target despite the excise duty cut, saying increased revenue collections would absorb the impact of the cuts.

Madhya Pradesh Chief Minister Shivraj Singh Chouhan too congratulated Prime Minister Narendra Modi and BJP president Amit Shah for reducing the prices of petrol and diesel by Rs 2.50.

Nearly half of the fuel price is made up of taxes.

"I hope all state governments do this, and they announce this so that consumers benefit by 5 rupees", Jaitley told reporters. Calling it an election gimmick, the Congress said the BJP will face imminent defeat in the upcoming Assembly elections of five states. If the Centre is serious, it should reduce the tax to what it was when it assumed office. On top of this, states levy value-added tax (VAT).

"The Centre had hiked excise duty by ₹10 and reduced it by only ₹2.50".

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