Why FM Nirmala Sitharaman increased petrol, diesel prices by Rs 2 in Budget 2019
The common man was left disappointed as Budget 2019 proposed to increase the prices of petrol and diesel by Rs 2 each.
The common man was left disappointed as Budget 2019 proposed to increase the prices of petrol and diesel by Rs 2 each. The prices would increase as the government has decided to hike the Special Additional Excise duty and Road and Infrastructure Cess by Re 1 each.
In her maiden budget speech, Finance Minister Nirmala Sitharaman said, " I propose to increase Special Additional Excise duty and Road and Infrastructure Cess each by one rupee a litre on petrol and diesel."
The announcement disappointed the common man while shares of petroleum companies tanked by several points at the stock market.
On her part, Sitharaman, however, gave a rationale for increasing the prices of these essential fuels by Rs 2. Sitharaman argued that the decreasing crude prices in the international market provides the government an opportunity to review the excise duty and cess on petrol and diesel.
"Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol and diesel," said Sitharaman.
Not much impact on you?
The Economic Survey 2019, which was released Thursday, also predicted that the crude oil prices are expected to decline in this financial year. This means the reducing crude oil prices are likely to balance off the pinch you may face with the surprise Rs 2 fuel price rise to be effected by Budget 2019.
The survey said that crude oil prices will decline in 2019-20 and push consumption.
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Crude oil prices today
On Friday, crude oil prices fell as concerns over the outlook for global economic growth outweighed increasing tensions in West Asia that might disrupt supply routes and send prices higher, reported news agency Reuters.
Analysts told the agency that oil is under pressure because of fears over future demand amid trade disputes threatening global economic growth.