Jaitley also asked state governments to cut value added tax on fuel by a further 2.50 rupees per litre.
Following this, the Gujarat and Maharashtra Governments announced additional relief of Rs2.5/litre Petrol/Diesel. Auto fuel prices in these states are expected to go down by Rs 5 per litre.
► Madhya Pradesh government has also chose to give an additional relief of ₹2.5/litre on Petrol and Diesel to give total benefit of ₹5/litre in the state, tweeted Madhya Pradesh CM Shivraj Singh Chouhan.More news: Russia Says It Delivered Advanced Missile Defense System To Syria Despite Objections
While Rs 1.5 will be reduced in the excise duty, Oil Marketing companies will absorb Rs 1 reduced in price. Global crude oil prices are linked to geopolity, fluctuation in the exchange rate as well as the tax structure of respective states and the Centre. The centre levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel.
The price of petrol in Delhi on Friday (Oct 5) was Rs 81.50 per litre while in Mumbai it was Rs 86.97.
Addressing mediapersons in New Delhi, Congress spokesman Randeep Singh Surjewala called the cut "a panic reaction in the face of public anger" ahead of assembly polls in four states.More news: Lewis Hamilton is totally focused on winning World title says Toto Wolff
Jaitley, however, said asking oil companies to bear a part some burden is not going back on deregulation.
Macro stability and fiscal prudence have been the hallmarks of this government, investors have taken solace in the fact that the NDA has been conservative and not indulged in fiscal profligacy - it also got lucky with benign oil prices through much of its term. He said that Rs 10,500 crore will be the impact of the excise duty cut this year.More news: Kershaw, Dodgers Hope To Increase Series Lead Over Braves
The minister also said he was confident of meeting the fiscal deficit target of 3.3% for the current fiscal year as direct tax collections had been strong.