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Price reduction to cost state coffers Rs 1,250 crore

THE ASIAN AGE. | UMAKANT DESHPANDE
Published : Oct 5, 2018, 2:44 am IST
Updated : Oct 5, 2018, 2:44 am IST

The government has not announced any relief on diesel on Thursday due to financial constraints.

(Representational Image)
 (Representational Image)

Mumbai: The Maharashtra government’s decision to further cut petrol prices by Rs 2.5 is likely to cost the state exchequer Rs 1,250 crore per annum. Petrol will now be cheaper by Rs 5.60 per litre following all the tax reductions. The government has not announced any relief on diesel on Thursday due to financial constraints. But due to public and opposition pressure, it will announce the cut in diesel prices very soon after completing formalities, said senior officials.

Waiting for the Union government’s decision, chief minister Devendra Fadnavis announced the cut in the petrol prices by Rs 2.5 per litre. Every reduction in petrol price by Rs 1, puts a financial burden of  Rs 500 crore on the state exchequer. Similarly, for diesel, price reduction by Rs 1 per litre costs the state a burden of  Rs 1000 crore, said finance minister Sudhir Mungantiwar.

 The Union government reduced central taxes by rs 1.50 per litre, which will reduce the state tax component on petrol by Rs 0.60 said officials. The state government will have to consider that financial burden also, said sources.

“When the Bharatiya Janata Party (BJP) was in the opposition, it always raised the fuel price hike issue. Now when we are in power, we have to reduce diesel prices also”, said a senior BJP leader.

The state has earned a lot of revenue in the last few months due to fuel price hike. Hence, now the government will shoulder the financial burden considering that additional revenue, said a senior officer.

Tags: petrol prices