Cut in fuel prices will boost consumer spending: Oil minister | India News – Times of India

by The Technical Blogs


NEW DELHI: Govt-run fuel retailers on Thursday slashed prices of petrol and diesel by Rs 2 per litre. In a separate post on X, the oil ministry said the latest reduction will “boost consumer spending and reduce operating costs for over 58 lakh heavy goods vehicles running on diesel, 6 crore cars and 27 crore two-wheelers”. Petrol and diesel prices have remained frozen since May 22, 2022 when the Centre last reduced excise duty on them.This was the second excise duty reduction in seven months that had followed a similar move on Nov 4, 2021.

The two reductions together had brought down the excise duty on petrol and diesel prices by a total of Rs 13 and Rs 16 per litre, respectively. After the second duty cut, BJP-governed states also implemented matching cuts in VAT to soften the impact of global oil prices.

Screenshot 2024-03-15 005246

Technically, fuel retailers are free to decide retail prices of petrol and diesel. But in practice, govt informally casts a long shadow. The recent fall in oil prices had turned petrol and diesel profitable for retailers but they were waiting for a signal. That is how prices have been held steady since the last reduction in 2022 even though fuel had switched between becoming loss-making and profitable proposition for various stretches of time in between.


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