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NEW DELHI: State-run fuel retailers on Thursday announced a reduction of Rs 2 per litre in the prices of petrol and diesel from Friday, marking the first cut in motor fuel rates in almost two years.
The announcement comes barely a day or two before the model code of conduct is expected to come into force with the announcement of the Lok Sabha polls.
The reduction follows recent reductions in the prices of CNG (compressed natural gas) and LPG, or liquefied natural gas, supplied as kitchen fuel to households.
“By reducing the prices of petrol and diesel by Rs 2, Prime Minister Narendra Modi has once again proved that the welfare and convenience of his family of crores of Indians is always his goal,” oil minister Hardeep Singh Puri said on microblogging site X.
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. This was the second excise duty reduction in seven months, coming after a similar move on November 4, 2021.
The two reductions together had brought down the excise duty on petrol and diesel by a total of Rs 13 and Rs 16 per litre, respectively. After the second duty cut, the BJP-ruled states also implemented matching cuts in VAT to soften the impact of oil prices surging above $100 per barrel after the Ukraine conflict.
Technically, fuel retailers are free to decide the retail prices of petrol and diesel. But in practice, the government 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 May 2022 even though petrol and diesel had switched between becoming loss-making and profitable proposition for various stretches of time in between.
Lower fuel prices will lead to “more disposable income, boost for tourism and travel industries, control over inflation, increased consumer confidence and spending, reduced expenses for businesses dependent on transportation, enhanced profitability for logistics, manufacturing, and retail sectors, the ministry said adding, it will also reduce outgo for farmers on tractor operations and pump sets.
Last week CNG prices were reduced by Rs 2.50 per kg by city gas operators across the country. This was followed by the government extending subsidy for LPG supplied under the Ujjwala scheme to poor households and reducing the price of refills for general category consumers by Rs 100.
The announcement comes barely a day or two before the model code of conduct is expected to come into force with the announcement of the Lok Sabha polls.
The reduction follows recent reductions in the prices of CNG (compressed natural gas) and LPG, or liquefied natural gas, supplied as kitchen fuel to households.
“By reducing the prices of petrol and diesel by Rs 2, Prime Minister Narendra Modi has once again proved that the welfare and convenience of his family of crores of Indians is always his goal,” oil minister Hardeep Singh Puri said on microblogging site X.
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. This was the second excise duty reduction in seven months, coming after a similar move on November 4, 2021.
The two reductions together had brought down the excise duty on petrol and diesel by a total of Rs 13 and Rs 16 per litre, respectively. After the second duty cut, the BJP-ruled states also implemented matching cuts in VAT to soften the impact of oil prices surging above $100 per barrel after the Ukraine conflict.
Technically, fuel retailers are free to decide the retail prices of petrol and diesel. But in practice, the government 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 May 2022 even though petrol and diesel had switched between becoming loss-making and profitable proposition for various stretches of time in between.
Lower fuel prices will lead to “more disposable income, boost for tourism and travel industries, control over inflation, increased consumer confidence and spending, reduced expenses for businesses dependent on transportation, enhanced profitability for logistics, manufacturing, and retail sectors, the ministry said adding, it will also reduce outgo for farmers on tractor operations and pump sets.
Last week CNG prices were reduced by Rs 2.50 per kg by city gas operators across the country. This was followed by the government extending subsidy for LPG supplied under the Ujjwala scheme to poor households and reducing the price of refills for general category consumers by Rs 100.
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