Petrol, diesel costs cut by Rs 2.50 after excise reduction; oil cos retaining Re 1

New Delhi, Oct 4 The government Thursday reported a Rs 2.50 a litre cut in petrol and diesel costs, calculating in extract obligation decrease of Rs 1.50 for each litre and requesting that oil companies to absorb another Re 1

Finance Minister Arun Jaitley said the excise duty cut would have an effect of Rs 10,500 crore on central government's tax revenues

He also asked that state governments go with the same pattern by cutting a sales tax or VAT by a similar amount

The reduction followed petrol and diesel costs touching new highs

In Delhi, where the fuel costs are the least among all metros and most state capital, petrol is sold at Rs 84 for each litre and diesel at Rs 75.45

Jaitley said the move followed Brent crude oil touching four-year high of USD 86 a barrel Wednesday and interest rates in US reaching seven-year high

Inflation in India, however, is still direct at less than 4 percent and higher direct expense accumulations give comfort as to monetary deficiency, he said including household macroeconomic indicators are strong and stable, except for current account deficit (CAD).