India fuel price cuts send oil firm shares down on regulation concerns

India fuel price cuts send oil firm shares down on regulation concerns

According to Telangana Petroleum Dealers Association, the fuel prices would come down by Rs 3 as the Centre had announced a cut in excise duty.

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

With a similar increase, petrol is now priced at Rs 83.52 and Rs 84.89 per litre in Kolkata and Chennai, respectively.

Two days after the Central government provided relief to citizens by announcing reduction of fuel prices all over the country, Petrol and Diesel prices again witnessed a fresh hike in Delhi on Saturday.

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The petrol and diesel prices have resumed the ascending trend today.

The price cut reduced the government's excise duty by 1.50 per litre and cut one rupee per litre on the amount charged by state-run oil marketing firms Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp.

The move reversed a 2014 decision to scrap regulated fuel prices, a regime that was blamed for deterring state oil marketing firms from expanding and for choking off investment in domestic oil fields by India's biggest oil producer. PM Modi consulted Union Finance Minister Arun Jaitley and Oil Minister Dharmendra Pradhan.

All the cuts will be effective from midnight, as clarified by Dr. Hasmukh Adhia, finance secretary.

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The Finance Minister said, the prices of crude oil and domestic developments in the USA have impacted the economies across the world. The states where the prices have been decreased are Gujarat, Chhattisgarh, Tripura, Jharkhand, Uttar Pradesh, Madhya Pradesh, Maharashtra, Himachal Pradesh, Haryana, Assam, Arunachal Pradesh, Uttarakhand, Jammu and Kashmir and Goa, said reports.

In a boost to oil companies, the Reserve Bank of India (RBI) on Wednesday eased the overseas borrowing norms by up to $10 billion. However, in Mumbai, the diesel have gone up by 7 paise only. However, opposition ruled states remained non-committal on reducing Value-Added Tax.

"With this people will get the relief to the tune of Rs 5 per litre", he said. Any further revenue loss, however, could widen the fiscal deficit.

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