Petrol, diesel prices cut by Rs 2.50 per litre

Out of this, the oil marketing companies will absorb one rupee per litre and Excise duty on petrol, diesel to be cut by one rupee 50 paise. He also said he would write to all the states to cut their respective taxes. BJP-ruled Gujarat, Tripura and Chhattisgarh governments have also announced a similar reduction in oil prices.

Apart from this, the oil marketing companies in India have been asked to bear the remaining burden of Re 1 per every litre and with this, the customers will get a relief of Rs 2.50 per litre on both petrol and diesel.

Petrol in Mumbai will now be available at Rs 86.34 per litre while in Ahmedabad, it will be available for Rs 78.21 per litre.

The fuel prices had been going up every day for last few weeks, burning a hole in people's pockets.

She said that the Centre can dictate the BJP-ruled states but not the others.

Jaitley said the total impact of Rs 1.50 cut in excise duty is about Rs 21,000 crore for full year and Rs 10,500 crore the reminder of current fiscal.

Justifying the minimal relief in fuel prices, Jaitley said "We have to react to the situation and give relief without impacting the fiscal deficit". The announcement was made by Finance Minister Arun Jaitely today.

Rates of subsidised domestic cooking gas, too, have breached the Rs 500-mark for the first time. Since petroleum prices have been de-regularised, increase in global crude prices result in an immediate increased in local prices.

Brent, the benchmark for more than half the world's oil, has touched United States dollars 86 per barrel mark, the highest in four years.

"Ever since the Modi government assumed office, it has raised excise duty on diesel by Rs 14 and petrol by Rs 9 per litre".

Delhi chief minister Arvind Kejriwal also took to Twitter saying that the Modi government has hiked the excise duty by Rs 10 and slashed prices by just Rs 2.50. Calling it an election gimmick, the Congress said the BJP will face imminent defeat in the upcoming Assembly elections of five states.

In India, nearly half of the price of retail fuel is due to taxes. The centre now levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel.

Last month, Rajasthan, Karnataka, Kerala and Andhra Pradesh had reduced value added tax (VAT) or sales tax to cushion consumers for a spate of price increases. The Gujarat Chief Minister tweeted that it has matched the central government's reduction, and that petrol and diesel are now cheaper by Rs 5 per litre.