India seeks to reassure markets on deregulation of fuel prices

India seeks to reassure markets on deregulation of fuel prices

India seeks to reassure markets on deregulation of fuel prices

Following Centre's move, Maharashtra government has also announced a Rs 2.5 reduction on the petrol.

G Vinay Kumar, general secretary of Telangana Petroleum Dealers Association, said the fuel prices were more likely to see a dip from Thursday midnight. "Happy to announce relief on diesel too!"

All four states are BJP ruled.

By lowering duties, the Narendra Modi government is borrowing a page from the rulebook of past governments that have lowered levies whenever global oil prices shot up. "We have requested the States to make a similar cut".

Sources said the Centre has also urged the State governments to slash taxes on petrol and diesel which will is likely to further reduce the prices by at least Rs 5 per litre. Gujarat had announced a price cut to the same tune. The central government dropped the central excise duty on fuel by Rs 1.50 a litre and asked oil companies to absorb Rs 1/litre.

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Jaitley said he on Wednesday met Oil Minister Dharmendra Pradhan and inter-ministerial consultations continued on Thursday.

Yet now that the higher oil prices have combined with a falling rupee after the latest quarterly economic growth figures turned out disappointing, with the deficit widening, India is facing a serious challenge in sustaining its growth while reducing the adverse impact of the latest oil market developments. At a time when the Goods and Services Tax (GST) collections have clearly not kept pace with expectations, GST revenue collection for September crossed Rs 94,000 crore falling short of the one lakh crore target per month set by the government. On the other hand, Haryana has also lowered Value-Added Tax by 2.88% on petrol and 3.22% on diesel.

The RBI said that the state-owned oil companies can raise external commercial borrowings (ECBs) for working capital with minimum average maturity of 3-5 years and they don't have to mandatorily hedge all ECBs. The states where the prices have been decreased are Gujarat, Chhattisgarh, Tripura, Jharkhand, Uttar Pradesh, Madhya Pradesh, Maharashtra, Himachal Pradesh, Haryana, Assam, Arunachal Pradesh, Uttarakhand, Jammu and Kashmir and Goa, said reports. Petrol in Panchkula is priced at Rs 79.99 per litre and diesel at Rs 71.67 per litre. For instance, if worldwide oil prices keep going up and we tweak the taxes, it will not bring any benefits.

The fuel prices had been going up every day for last few weeks, burning a hole in people's pockets.

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