Maharashtra, Gujarat cut fuel prices by Rs 2.50; Kerala, Karnataka refuse

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He also asked the states to match the cut announced by the states to give further relief to the masses and Gujarat and Maharashtra immediately followed suit.

He said the reduction in fuel price wasn't bad economics.

The only option could be to ask the oil companies to freeze prices and recoup losses when rates fall in future. "This will be a test for all state governments, especially leaders who were only offering lip service earlier", Mr Jaitley pointedly remarked.

Maharashtra chief minister Devendra Fadnavis said that his government also decided to make a matching cut as this would be a "great relief" to the people. In what was seen as a political challenge to the states ruled by opposition parties, the minister said while he would send a written appeal to the states, the decision would be theirs and the government will not interfere. Diesel prices in Chennai increased by 22 paise to Rs 79.79 a litre and by 20 paise to Rs 77.30 per litre in Kolkata.

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The hike pushed petrol price in Delhi to an all-time high of Rs 84 per litre and diesel to Rs 75.45.

He appealed to the states to reduce Value-Added Tax by Rs 2.50 to take the total cut to Rs 5 per litre for the common man.

Surjewala said the government must also answer to the people for hiking central excise duty on 12 occasions, raising the central excise on petrol by 211 pc and on diesel by 443 pc.

The Uttar Pradesh government also reduced the price.

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"Maharashtra Government also chose to give additional relief of Rs 2.5/litre on Petrol to give total benefit of Rs 5/litre in the State of Maharashtra", Fadnavis tweeted.

Soon after the announcement, the NDA-led governments in Gujarat, Maharashtra, Chhattisgarh and Jharkhand followed the Centre's footsteps announcing a cut of Rs 2.50 per litre in fuel prices.

Since mid-August, the petrol price has risen by Rs 6.86 a litre and diesel by Rs 6.73 - the most in any six-week duration after the daily price revision was introduced in mid-June past year.

Fuel prices across the country have been scaling new heights everyday on the back of sustained depreciation of the rupee against the dollar and crude prices trading around its four-year high of $86 per barrel. But growing public anger over surging fuel prices has caught the attention of the government. A high-level meeting convened by the Prime Minister Narendra Modi has made a decision to reduce the Excise Duty by 1.50 Rupees. Kerala was one of the first states to cut excise duty.

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