Petrol, Diesel cheaper by Rs 5 from midnight

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Maharashtra Chief Minister Devendra Fadnavis was the first one to announce the decision.

Hailing the government's decision to cut petrol and diesel prices by Rs 2.50 per litre, BJP President Amit Shah on Thursday said all the party-ruled states will give additional relief of Rs. 2.50 per litre by reducing Value-Added Tax. 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. "Our OMCs will also absorb 1 rupee, resulting in an overall reduction of Rs 2.50 in prices of both petrol and diesel".

Finance Minister Arun Jaitley announced a cut of R s 2.50 percent in fuel prices. So it is easier for states to forego a part of the additional revenue that they receive due to price increase.

Additionally, oil companies are to be asked to absorb another Re 1 per litre.

Soon after the announcement, the NDA-led governments in Gujarat, Maharashtra, Chhattisgarh and Jharkhand followed the Centre's footsteps announcing a cut of Rs 2.50 per litre in fuel prices.

Asked by a reporter about the economic implications of the move, Jaitley said the decision was "good economics" as it won't impact the fiscal deficit and will allow consumers to boost spending on other goods. "UP Govt has also chose to give additional relief of Rs. 2.50 per litre on the prices of petrol & diesel", said CM Yogi Adityanath.

The Uttar Pradesh government also reduced the price.

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The Government will request state governments to cut down, he said.

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

Petrol prices on Thursday touched an all-time high of Rs 91.34 per litre in Mumbai.

Karnataka and Kerala have said that they will not be cutting state-imposed taxes on petrol and diesel.

For state-owned fuel retailers absorbing Re 1 per litre price would mean about Rs 10,700 crore dent in their revenue on an annualised basis. Diesel prices in Chennai increased by 22 paise to Rs 79.79 a litre and by 20 paise to Rs 77.30 per litre in Kolkata. "We are committed to 3.3 per cent figure, we will maintain that", he said.

"Since May 2014, Modi Government has fleeced and duped the common people by draconian taxation of Rs 13 lakh crore".

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