India cuts excise duty on petrol, diesel in series of steps to tackle inflation

India’s central government has reduced excise duty on petrol and diesel as part of a series of measures aimed at lowering inflation.

To mitigate the impact of higher prices, the government will set aside additional funds to subsidize fertilizers and gas cylinders.

The measures were announced in a series of tweets by Finance Minister Nirmala Sitharaman on Saturday, as retail inflation reached an eight-year high and wholesale inflation reached a three-decade high.

Petrol and diesel excise duties have been reduced by Rs8 ($0.1027) and Rs6 ($0.077) per liter, respectively.

“This will bring petrol prices down by Rs9.5 ($0.122) per liter and diesel prices down by Rs7 ($0.09) per liter,” Sitaraman said. “It will cost the government around Rs 1 lakh crore ($12.84 billion) per year in revenue.”

Currently, the excise duty on one liter of petrol in Delhi comes to Rs 27.9 ($0.358) and on diesel, the duty comes to Rs 21.80 ($0.28).

The Center will also extend a subsidy of Rs 200 ($2.568) per LPG cylinder (up to 12 units) to over 90 million beneficiaries of the Pradhan Mantri Ujjwala Yojana.

The cut in excise duties will help cool inflation and complement monetary policy.

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