Immediately after the announcement, and the declaration by the Finance Minister, three states have responded, and reduced the price of petrol and diesel by Rs 2.5, thereby making the overall reduction to Rs 5 per litre.
The price cut sparked fears of the country going back toward the regulated regime where the prices of diesel and petrol were controlled by the government.
PTI The government has made a decision to cut Rs 2.50 per litre on both petrol and diesel.
The move by the central and state governments will cost the exchequer a significant amount but will provide relief for consumers.
Jaitley said he on Wednesday met Oil Minister Dharmendra Pradhan and inter-ministerial consultations continued on Thursday.
Karnataka, Kerala, New Delhi refuse to cut petrol, diesel prices
Eleven states announced cuts in prices of petrol and diesel on Thursday after the central government slashed excise duty on fuel. Within minutes, however, the Congress attacked the government for a "meager" reduction in excise duty on petrol and diesel.
However, very soon, the prices can be reduced by Rs 5 as well!
The state will do so if the Centre bring the fuel prices down to the level when the Narendra Modi government assumed office in May 2014, Issac told the media here while reacting to Union Finance Minister Arun Jaitley's statement in this regard.
While the recent tax cut by the government resulting in the lower fuel price is great news for consumers, global oil prices are still a big determinant on how petrol and diesel are ultimately priced in India.
Jaitley said the impact of the excise duty cut on the Centre's revenues would be about Rs 21,000 crore in a full year and Rs 10,500 crore in the remainder of the current financial year.
Jaitley said India had huge avenues of growth over the next 10-20 years to sustain its high growth rate. "Thus petrol & diesel wd be Rs. 5 cheaper in the State of Gujarat". "The government will bear the losses in the larger public interest", Fadnavis said. Prices have seen a similar hike in other cities as well.
This is the second time in one year that the Centre has cut excise duty on petrol and diesel as rising prices pinch the common man.