New Delhi: Finance Minister Arun Jaitley on Thursday announced a Rs 2.5 cut in per litre price of diesel and petrol and asked state governments to announce a matching reduction.
The minister said the centre would reduce the tax rate by Rs 1.5 per litre while oil marketing companies would absorb another Re 1.
The reduction comes ahead of assembly elections in five states: Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram.
Petrol prices were Thursday had gone up by 15 paise a litre and diesel by 20 paise, pushing retail prices in Delhi to an all-time high of Rs 84 per litre and diesel to Rs 75.45.
Jaitley said the reduction in fuel price for customers wasn’t bad economics.
“This is perfectly good economics… we want consumers to spend money on other items also… and to do it without impacting the fiscal deficit is still good economics,” Jaitley announced after inter ministerial discussions with petroleum ministry.