Under attack for the rise in petrol and diesel prices, the Finance Ministry finally reduced the Basic Excise Duty on these fuels by ₹2 a litre, effective Wednesday.

After the cut, the retail price of petrol in Delhi is expected to be near ₹68 a litre, while that of diesel, ₹57.

It remains to be seen whether the States will bring own the Value Added Tax rates levied by them on these two products.

The Finance Ministry was also quick to point out the revenue loss that the Centre would incur on account of these reductions in excise duty: the loss would amount to ₹26,000 crore for the whole fiscal, and about ₹13,000 crore for the remainder of the current financial year.

The Ministry said the decision was taken by the government in order to cushion the impact of high prices on the common man.

Earlier, due to the increase in the global prices of petrol and diesel, during the last few weeks, the retail prices of the fuels in Delhi had risen to ₹70.83 and ₹59.07 respectively, as on October 2. This price rise was also reflected in WPI inflation, which rose to 3.24 per cent in August, against 1.88 per cent in July.

Before the revision, the excise duty on petrol stood at ₹21.48 a litre while the duty on diesel was ₹17.33.

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