Diwali cheer: Centre cuts excise duty on petrol by Rs 5, diesel by Rs 10

Experts said the increase in consumption and tax buoyancy will help offset excise duty cuts on fuels to an extent

The Centre on Wednesday announced a reduction in excise duty on petrol by Rs 5 a litre and on diesel by Rs 10 a litre. This will come into effect from Thursday, when the country celebrates Diwali, and is expected to boost consumption, and bring down input costs for farmers and businesses.

“Prices of petrol and diesel will thus come down accordingly,” the finance ministry said in a statement here. The ministry also urged the states to commensurately reduce value-added tax (VAT) on the two fuels to give relief to farmers.

The retail price of petrol was over Rs 100 a litre