Following this, several opposition leaders said that the government decreased the prices in lieu of upcoming elections and that the relief was too less in comparison to the surge in fuel prices over the past few months.
Excise duty to be reduced by Rs.1.50 & OMCs will absorb 1 rupee.
So much for good governance?
The move by the central and state governments will cost the exchequer a significant amount but will provide relief for consumers. Now, people would get some relaxation as the price has decreased from Rs 2.50 to Rs 5 on Friday.
"Three major factors decide crude oil prices".
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Petrol was sold at 83.85 rupees a litre, while diesel was sold at 75.25 a litre on October 3, according to state-run retailer Indian Oil Corp's website.
Last month, Rajasthan, Karnataka and Andhra Pradesh had reduced Value-Added Tax to cushion consumers for a spate of price increases. Petrol prices were regulated until 2012, while diesel prices remained so until 2014.
The government of India has finally pitched in to cut down the prices of fuel in India by cutting the excise on petrol and diesel.
Yet now that the higher oil prices have combined with a falling rupee after the latest quarterly economic growth figures turned out disappointing, with the deficit widening, India is facing a serious challenge in sustaining its growth while reducing the adverse impact of the latest oil market developments.
However, the Federation of All Maharashtra Petrol Dealers Association (FAMPEDA), Chairman, Uday Lodh, while welcoming the reductions, pointed out that the daily price increase by the Oil Marketing Companies will continue as per the global crude oil price fluctuations.
Jaitley said the total impact of Rs 1.50 cut in excise duty is about Rs 21,000 crore for full year and Rs 10,500 crore the reminder of current fiscal. "We have to strike a fine balance among all aspects", Pradhan said in an interview to the magazine in June this year.