Consumer emerges victorious: petrol diesel prices down by Rs 2/litre, Finance Minister reduces excise duty
New Delhi, September 4: Due to the rising public criticism of keeping the duty high despite international oil prices going up Finance Minister Arun Jaitley on Tuesday announced Govt of India has reduced Basic Excise Duty rate on Petrol & Diesel with both branded and unbranded by Rs. 2 per litre w.e.f. 4th October,2017.
Here the consumer had having won a victory because there has been a huge pressure on the government to take a re-look at the excise duty and on auto fuel.
Despite that Oil Minister Dharmendra Pradhan had ruled out any change in the duty,and However finally the government has Yielded to public pressure.
Reports say that The Centre is also pushing state governments to affect a cut in value added tax (VAT), which will further reduce prices. It has even asked companies to cut the prices.
Government officials have indicated that a price cut of Rs 5 per litre on petrol and diesel is likely clears in reports.
According to the reports says that Petrol and diesel will cost Rs 2 litres less from Wednesday, after the first excise duty cut by our Prime Minister P.M. Modi government that comes in to effect.
Recent petrol cost s 70.88 per litre in Delhi while a litre of diesel is priced at an all-time high of Rs 59.14.
Finance Minister Arun Jaitley announced the decision on his tweet;
Govt reduces basic excise duty rate by rs2 per litre on petrol & diesel (both branded&unbranded) wef 4.10.17
— Ministry of Finance (@FinMinIndia) October 3, 2017
As per the public Public pressure and opinions, the government between November 2014 and January 2016 raised excise duty on petrol and diesel for nine times, we can see that petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 litre in 15 months which is already helped the government excise that hiked more than the double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
The main intention was to take away gains arising from plummeting global oil prices. that cane under severe criticism from various sector, that includes Oppositions parties for not cutting the excise duty though the international prices started to rise since early July.
Impact the government and marketing companies
The Duty cut that effect the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year, and on marketing companies the cut is unlikely affected their marketing margins. and the entire excise cut will be passed on to the consumer.
Analysts says that Mahesh Nandakumar of CLSA stated that this move indicate the government is under political compulsions. and the the revenue reduction by Rs 13,000 crore can have an impact on the government’s fiscal situation if the goods and tax (GST) collection does not pick up.
Also it also be noted that the government GST collection in August,the second month of the indirect tax regime, declined marginally to Rs 90,669 crore from Rs 94,063 crore in July.
This Figure doesnot include GST paid by 10.24 lakhs,which have opted for the composition schemes
The excise cuts shows that the government is noticing the customers needs and pressures and the decisions being hailed by many as a good move.
New reforms steps shows that the government is not pushing the oil marketing companies to cut the prices.