Budget 2018: Petrol, diesel prices hit all-time high on Budget day

Budget 2018 Here Is Why The Cut In Excise Duty On Petrol Diesel Will Not Reduce Prices For Consumers

Budget 2018 Here Is Why The Cut In Excise Duty On Petrol Diesel Will Not Reduce Prices For Consumers

Last week, Oil Minister said that wary of price rise it was pushing for a cut in excise duty on petrol and diesel in the 2018-'19 Budget. However, that made no difference to the rising petrol and diesel prices as this Rs 8 amount was converted to "road cess" on fuel, thereby, making no change in the price of petrol and diesel for the consumer effectively. In Delhi, petrol price was at Rs 73.10 per litre today while diesel was at Rs 64.11 per litre.

Finance Minister Arun Jaitley will present the current NDA government's fifth and arguably his toughest Budget yet as he seeks to address agriculture distress, create jobs and boost growth while at the same time stick to fiscal prudence.

The Modi government also abolished additional excise duty on fuel by Rs 6.

The fuel prices, which are revised on daily basis, have constantly been rising since December 1.

However, these reductions are offset by the introduction of a Rs. 8 per litre road and infrastructure cess on petrol and high speed diesel.

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The petrol and diesel prices do not come under the GST. But petrol and diesel will not be cheap. It will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931. On diesel as well, the excise duty has been cut by Rs 2 to reach Rs 6.33 per litre.

Previously, Road and Infrastructure cess on motor spirit stood at Rs 6 per litre. He has limited scope to manoeuvre with tax rates as central excise duty, which was levied on goods manufactured in the country, and service tax have both been subsumed in the GST. The Ministry's overall capital expenditure for FY 19 has been budgeted at Rs 91,663 crore and increase of 10 per cent from FY 18 (RE).

CLSA on Jaitley's decision said, "There has been some re-jigging of the excise classification (infra/road cess and basic excise) for petrol and diesel but effectively the overall excise burden is unchanged".

In January, fuel prices touched a 40-month high in Mumbai.

Secondly, the government also provides a subsidy for fuel products in order to buffer against prices.

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