New Delhi: As the rupee value depreciates and fuel prices touch new heights, the Union Finance Minister, Arun Jaitley had a brief meeting with the Union Petroleum Minister, Dharmendra Pradhan in order to negotiate the fuel price.
After the meeting, Arun Jaitley held a press conference in which he said, “The Brent oil has crossed $86 as of yesterday and the interest rates have touched the mark of 3.2 percent, making it the highest ever in the US. This has led to a dollar flow back into the US markets. A large step is being contemplated in this regard”.
He also announced a cut in the excise duty. The cut is observed to be Rs 1.50.
Arun Jaitley said, “The oil marketing companies will be absorbing Rs. 1 from the Centre and we in turn would provide Rs. 2.50 cut off as a relief on petrol and diesel.”
As some of the non-BJP ruling states retaliated on the move, Jaitely said, “Lip sympathy will not help? What were these states doing?”
“I’m not going to interfere in the state matters. Let them decide. I’ll write to the state governments requesting a waiver on the local tax on fuel,” he added.
As the announcements were out to the states to cut the tax and bring a relief, 10 of the BJP ruling states responded positively. The states were namely Gujarat, Maharashtra, Uttar Pradesh, Chattisgarh, Madhya Pradesh, Haryana, Uttarakhand, Assam, Arunachal Pradesh and Tripura.
A Rs 5 relief was observed following the request of Jaitely and a Rs 2.50 cut off on diesel was observed in Jharkhand, excluding petrol.
Some of the states including Rajasthan, Karnataka, West Bengal and Andhra Pradesh gave no cuts as they had already reduced VAT.
This move is supposed to give a boost of Rs. 10,500 Cr to the centre’s tax. Petrol and diesel are said to constitute more than one third of the Centre’s income, making it one of the major sources of income to the government.
Karnataka and Kerala refuse to cut the rates
The Karnataka Chief Minister H D Kumaraswamy welcomed and appreciated the measures taken by the central government.
Speaking after the press statements made by Arun Jaitley, HDK said, “Although the Centre has opened its eyes now, the Karnataka state will not reduce the tax on fuel. We had done it before they did.”
“The central government must have reduced the prices observing the difficulties faced by the people earlier. We appreciate the move”, he added.
Similarly Kerala Finance Minister Thomas Isaac has completely rejected the request made by Jaitely.
Reacting to the Jaitely’s request, Isaac said, “The state will do so, only if the Centre will lower the fuel price as it was when the Modi government had taken charge of the office in 2014.”
“Since the Modi government has come to power, a constant rise in the excise duty is seen. Diesel and petrol were raised by Rs 14 and Rs 9 per litre respectively. One should understand, that reductions made on Thursday are on these rates.”
“If they are very concerned about it, then they should reduce the tax to what it was when they had taken charge”, he added.
