The Indian government on Saturday announced a reduction on central excise duty on Petrol by Ind Rs 8 per litre and on Diesel by Ind Rs 6 per litre.
Indian Finance Minister Nirmala Sitharaman said that this will reduce the price of petrol by Ind.Rs 9.5 per litre and of Diesel by Ind Rs 7 per litre.
It will have a revenue implication of around Indian Ra 1 lakh crore/year for the Indian government.
Petrol price in Delhi will from Sunday cost Rs 95.91 a litre 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.
Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a BOB Economics Research report showed.
Rising fuel prices in India in the past few weeks have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.