He said the Kerala government wants the Centre to remove taxes on petrol and diesel that were imposed when the BJP-led government imposed in 2014 after coming to power. Hence, petrol and diesel prices in Tripura too has reduced by Rs 5 per liter. Diesel prices went up by almost 30 paise and petrol prices increased by nearly 20 paise. When compared to the neighboring states, Arunachal Pradesh levies 20 pct Value-Added Tax on petrol and 12.50 pct on diesel and Tripura collects Value-Added Tax at the rate of 23.15 pct on petrol and 16.18 pct on diesel.
Oil prices in India are not linked to global crude prices but to a phenomenon called elections, the Narendra Modi government has virtually confirmed by waving a wand and bringing down the prices of petrol and diesel by at least Rs 2.50 a litre. In Chennai, petrol and diesel prices climbed to Rs 84.89 and Rs 77.42 respectively. The central government dropped the central excise duty on fuel by Rs 1.50 a litre and asked oil companies to absorb Rs 1/litre.
In a major relief for consumers, the government on Thursday reduced excise duty on petrol and diesel by Rs 1.50 per litre and said the oil marketing companies (OMC) will absorb the impact to the tune of Re 1 per litre.
The new prices became applicable from Thursday midnight.
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Even though the central government and some BJP-ruled state governments reduced the prices by Rs 5 collectively, the results are not positive for the four metro cities, out of which, three are ruled by non-BJP governments.
"And reducing oil prices, if you say is good politics, so be it", said Mr Jaitley. The government has upped its ante and steps has been taken to cut down on the borrowing by Rs 70,000 crore and it has allowed OMCs to raise $10 billion.
By lowering duties, the Narendra Modi government is borrowing a page from the rulebook of past governments that have lowered levies whenever global oil prices shot up. Any further revenue loss, however, could widen the fiscal deficit.