Excise duty on fuel lowered by Rs 2 but road cess raised to Rs 8 from Rs 6

This comes at a time when the petrol and diesel prices are touching new heights

Last Updated : Sep 25 2018 | 10:37 AM IST

Giving a major boost to fuel consumers, the Union government today cut the excise duty on petrol and diesel by Rs 2 per litre.

However, Opposition parties cried foul that the hike in road cess from Rs 6 to Rs 8 per litre has negated the impact of the excise duty cut. This comes at a time when the petrol and diesel prices are touching new heights with global crude oil prices too surging upwards of $70 per barrel. Petrol and diesel prices in Delhi were at Rs 73.05 per litre and diesel was at Rs 64.11 a litre. Meanwhile, fuel prices in Mumbai were seen at Rs 80.91 per litre, while diesel was seen at Rs 68.27 for diesel.

“Cut in excise duty sends a clear signal that government wants the consumers not to pay beyond these levels of retail prices and also the retail price oil de-regulation is here to stay. This sends a strong signal to investors that Modi government’s reform measures are long term and here to stay,” said Debasish Mishra, head of Energy and Resources, Deloitte India.

Meanwhile, the Budget also expanded the mandate of Pradhan Mantri Ujjwala Yojana from 50 million to 80 million. Those in Scheduled Caste and Scheduled Tribe categories, even if not below the poverty line, may also be included in the expanded bandwidth.

The PMUY, which was launched on May 1, 2016, in Ballia district in Uttar Pradesh with a target of providing 50 million gas connections in three years to families living below the poverty line, has already covered 33.41 million consumers in 712 districts. As per the scheme, a budgetary support of Rs 1,600 is being given to each family.

On the other hand, Rs 163-billion Saubhagya scheme aims at providing “last mile electricity connectivity to all rural and urban households” by the end of 2018.

Meanwhile, Opposition parties were up in ante against the rise in cess. "Fuel price fraud: Excise duty reduced by 2% i.e. ₹2 less per litre, but hiked cess per litre from ₹6 to ₹8," CPM general secretary Sitaram Yechury tweeted today.