India has cut consumer taxes on fuels after the surging cost of crude oil pushed fuel prices to jump to record highs
The Indian government made the bold move which they say is a decision aimed to ease price rises and “further spur the overall economic cycle.”
Global commodity prices have soared this year as economies around the world recover from the pandemic.
However, India’s fuel tax is also expected to boost demand for fuel as countries try to curb fossil fuel consumption.
India’s excise duty on petrol has been reduced by 5 rupees per litre, and by 10 rupees on diesel.
“The reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes,”
the government statement said.
Following the federal government’s announcement, at least ten states ruled by Prime Minister Narendra Modi’s Bharatiya Janata Party, or his political allies stated that they would go further and cut local fuel taxes by as much as another 7 rupees a litre.
The announcements came on the eve of the festival of Diwali, which sees the start of a busy festive season in India, typically marked by increased consumer spending.
