A much-needed and much-awaited relief to consumers as the government today announced a reduction in excise duty on fuel.


Excise duty to be reduced by Rs.1.50 and oil marketing companies will absorb 1 rupee. So, a total of Rs 2.50 will be reduced on both diesel and petrol, the Finance Minister Arun Jaitley, announced today.


"We are writing to the state governments that as the central government is cutting Rs 2.50 on both petrol and diesel, they do the same.


"Rs 10,500 Crore will be the impact of excise duty cut this year. Several macroeconomic data is indicating stable measures. The first quarterly results have shown an 8.2% growth. Inflation is still moderate less than 4%," Jailtey said.


He said the relief will not impact fiscal defict.  


The finance minister has also urged the state governments to reduce VAT or value added tax on petrol and diesel, to bring further relief to customers.