The Union government on October 3 cut excise duty on petrol and diesel by Rs. 2 a litre to tame rising inflation and to shield consumers from the surging price of auto fuels.
Fuel prices have started moving up owing to refinery shutdowns in the US following recent hurricanes. The duty cut came on the eve of the Reserve Bank of India’s (RBI) monetary policy review and is likely to send a signal to the central bank that the government was doing its bit to control inflationary pressures.
“The revenue loss on account of these reductions in excise duty is about Rs26,000 crore in a full year and about Rs13,000 crore during the remaining part of the current financial year,” said a statement from the finance ministry.