A high-level meeting convened by the Prime Minister Narendra Modi has chose to reduce the Excise Duty by 1.50 Rupees.
He also asked state governments to follow suit by cutting a sales tax or VAT by a similar amount.
However, the Federation of All Maharashtra Petrol Dealers Association (FAMPEDA), Chairman, Uday Lodh, while welcoming the reductions, pointed out that the daily price increase by the Oil Marketing Companies will continue as per the global crude oil price fluctuations.
Chhattisgarh, Assam and Tripura also reduced the fuel prices by Rs 2.50 per litre, while Andhra Pradesh and flood-hit Kerala refused the centre's request.
The State Government this evening announced a matching cut of Rs 2.50 in the fuel prices commensurate with the price slash of Rs 2.50, announced by the Central Government earlier today taking the total succor to Rs 5 per litre in J&K.
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However, the diesel prices were left untouched yesterday by the state government, which said an assessment was being made on this front.
As of Thursday, petrol prices in Delhi had climbed to ₹84 per litre and ₹91.34 in Mumbai; diesel was being sold at ₹75.45 and ₹80 in Mumbai. He said, the centre has allowed oil companies to raise 10 billion dollars through bonds.
Former Finance Minister P. Chidambaram said the government seems to be clueless. J&K, which is under Governor's Rule cut Value-Added Tax by Rs 2.5 per litre on the fuel.
"We are now working out a formula to bring down the diesel prices by at least Rs 4/litre".
For state-owned fuel retailers absorbing Re 1 per litre price would mean about Rs 10,700 crore dent in their revenue on an annualised basis. After the announcement that Oil Marketing companies will bear Re 1 loss per liter, their position weakened even further, thereby triggering a ripple effect. Brent crossed $86 per barrel and this is the highest in the last four years.
"I hope all state governments do this, and they announce this so that consumers benefit by 5 rupees", Jaitley told reporters. "Kindly bring petrol and diesel under the purview of GST", he tweeted in Hindi. It stands at Rs 15.33 per litre now.