It asked the states to match the centre's efforts by cutting value-added tax or VAT on fuel, which some states have done.
Oil prices in India are not linked to global crude prices but to a phenomenon called elections, the Narendra Modi government has virtually confirmed by waving a wand and bringing down the prices of petrol and diesel by at least Rs 2.50 a litre.
As of Thursday, petrol prices in Delhi had climbed to ₹84 per litre and ₹91.34 in Mumbai; diesel was being sold at ₹75.45 and ₹80 in Mumbai. Diesel is priced at Rs 80.10 per litre in the city.
Just last month, the Centre had said that it had no intention to cut excise duties on petrol and diesel and jeopardise its tax revenues. If the Centre is serious, it should reduce the tax to what it was when it assumed office. Both petrol and diesel were settled at Rs 88.97 a litre and Rs 81.99 a litre respectively.
Excise duty to be reduced by Rs.1.50 & OMCs will absorb 1 rupee.
The state of Karnataka, who earlier slashed fuel prices by Rs 2, will not be announcing any more cuts.
Global fuel prices, however, have been on the rise with the worldwide benchmark Brent crude nearing a four-year high of $86 per barrel earlier this week.
Share Prices Of Oil Companies Tank! Oil marketing companies, simultaneously, will take a Re 1 per litre hit as well.
► Gujarat CM Vijay Rupani said: "Finance Minister Sh @arunjaitley Ji has announced Rs.2.5 cuts in petrol & diesel prices, reciprocating positively to FM's announcement, the Govt Of Gujarat has also made a decision to reduce Rs.2.50 on both petrol & diesel". Absorbing this Rs 10,500 crore in increased collection and maintaining fiscal deficit I am confident we will be able to do that. But with a weakening rupee, it will likely have fewer options in the form of import-related tax cuts.