Central Government Plans Significant Cut in Petrol and Diesel Prices

The central government is reportedly considering a substantial reduction in taxes on petrol and diesel to address growing concerns about inflation. Sources suggest that petrol prices may witness a reduction of Rs 10 per litre, while diesel prices could be slashed by Rs 8 per litre. The Union Finance Ministry has submitted a proposal to oil companies outlining the plan to lower fuel prices.

This move is seen as a prompt response from the Bharatiya Janata Party (BJP) to alleviate public discontent stemming from the increasing prices of essential goods and food items. The strategy aims to garner support from voters in the upcoming general elections. Presently, oil companies are experiencing significant profits due to a decline in crude oil prices in the international market.

To provide relief to consumers, the proposal includes considerations for excise duty concessions along with adjustments to the refinery gate price. Despite a notable drop in crude oil prices to $78 per barrel globally, oil companies are enjoying substantial profits of eight rupees per litre on petrol and seven rupees per litre on diesel. The central government asserts that companies should share a portion of the loss resulting from the proposed price concession.

Two years ago, in response to soaring crude oil prices, the central government reduced taxes on petrol by Rs 8 and on diesel by Rs 6. The current decision to increase the windfall tax on petroleum crude oil from Rs 1,300 to Rs 2,300 per tonne indicates the government’s commitment to addressing economic challenges and supporting consumers.

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