In a major announcement aimed at controlling the rising prices in the country, the Centre on Saturday reduced the excise duty on petrol by Rs 8 per litre and diesel by Rs 6. The move will reduce the price of petrol by Rs 9.5 per litre and that of Diesel by Rs 7, Union Finance Minister Nirmala Sitharaman said.
Petrol price in Delhi will cost Rs 95.91 a litre from Sunday as against Rs 105.41 a litre currently while diesel will cost Rs 89.67 a litre as opposed to Rs 96.67 a litre now.
After the latest excise cut, the incidence of central tax on petrol will come down to Rs 19.9 a litre and that on diesel to Rs 15.8 per litre. "It will have a revenue implication of around Rs 1 lakh crore/year for the government," 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," she said.
The minister said the government will give a subsidy of Rs 200 per gas cylinder—upto 12 cylinders—to over nine crore beneficiaries of Pradhan Mantri Ujjwala Yojana.
A 14.2-kg LPG cylinder costs Rs 1,003 in the national capital. The beneficiaries will get Rs 200 subsidy directly in their bank accounts and the effective price for them would be Rs 803 per 14.2-kg cylinder.
The government is also reducing the customs duty on raw materials and intermediaries for plastic products where India's import dependence is high. The import duty on some of the raw materials of steel will be reduced while import duty on some steel products will be levied, Sitharaman said.
The minister said though the world was recovering from the Covid-19 pandemic, the Ukraine conflict has brought in supply chain problems and shortages of various goods. This has resulted in in inflation and economic distress in a lot of countries, she added.
"Even during the pandemic, our government set a paradigm of welfare, especially with PM Garib Kalyan Anna Yojana. This is now acknowledged and appreciated the world over," she said, referring to a scheme to provide free foodgrains to poor to help them tide over difficulties caused by a nationwide pandemic related lockdown.
"Despite the challenging international situation, we've ensured that there are no shortages/scarcity of essential goods. Even a few developed countries couldn't escape some shortages/disruptions. We are committed to ensure that prices of essential items are kept under control," she said.
Wholesale price inflation touched a record high of 15.08 per cent in April on price rise across all items. Retail inflation too rose to a near eight-year high of 7.79 per cent in that month, remaining above the RBI's inflation target for the fourth straight month.