The Centre Wednesday announced excise duty reduction on petrol and diesel ahead of Diwali. Excise duty on petrol and diesel will be reduced by Rs 5 and Rs 10, respectively, from November 4. The reduction in excise duty on diesel will be double that of petrol, the Ministry of Finance said in a statement. The move will provide relief to the farmers during the upcoming Rabi season, the ministry said, adding states have been urged to reduce VAT on petrol and diesel to give relief to consumers.

“In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure,” the ministry said.

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It said while the world had also seen shortages and increased prices of all forms of energy, the Government of India had made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet requirements.

The government’s decision to significantly reduce the excise duty on diesel and petrol was aimed to give a “further fillip to the economy”, which has witnessed a “remarkable turnaround post the COVID-19 induced slowdown” because of the “enterprising ability of India’s aspirational population,” the ministry said.

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The ministry said all sectors of the economy from manufacturing, services and agriculture are experiencing significant upward economic activity.

“The reduction in excise duty on Petrol and Diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes. Today’s decision is expected to further spur the overall economic cycle.”

Following the Centre’s decision, BJP-ruled Assam and Tripura announced to reduce prices of petrol and diesel by Rs 7 effective from November 4.

Opposition parties including the Congress have been targetting the ruling Bharatiya Janata Party (BJP) over record increase in prices of petrol, diesel and LPG. 

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As of October 31, petrol price had been hiked on 25 occasions since September 28, when a three-week-long hiatus in rate revision ended. In all, prices have gone up by Rs 8.15 a litre.

Diesel rates have been increased by Rs 9.45 per litre in 28 hikes since September 24.

Prior to that, the petrol price was increased by Rs 11.44 a litre between May 4 and July 17. The diesel rate had gone up by Rs 9.14 per litre during this period.

(With inputs from Press Trust of India)