Fuel duty cuts likely to help ease retail inflation by up to 25 bps

But experts call for other fiscal measures too to bring inflation down

fuel prices

ICRA Chief Economist Aditi Nayar tentatively pegged the CPI inflation rate at 6.5-7 per cent in May.

Indivjal DhasmanaArup RoychoudhurySanjeeb Mukherjee New Delhi
The Union government’s move to cut excise duty on petrol and diesel by Rs 8 and Rs 6 a litre, respectively, is likely to ease the retail inflation rate by up to 25 basis points (bps) from June onwards. If the move’s indirect impact on other items, including food prices, is also considered, the average inflation rate may reduce by 40 basis points during the current fiscal year.  

Since only nine days are left this month, the measure may impact the consumer price index (CPI)-based inflation rate by 7-8 bps only.

According to Devendra Pant, chief economist, India Ratings and Research, “The step is likely to have an impact of around 20-25 bps from June onwards, while in May, the

First Published: May 23 2022 | 06:02 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com