New Delhi, July 5: Fuel prices are set for a Rs 2 hike, as Finance Minister Nirmala Sitharaman, while rolling out her maiden Union Budget, proposed a special cess on both petrol and diesel. The cess would be applicable in the financial year 2019-20, Sitharaman said, adding that it would be utilised for infrastructure development purpose.
"I propose to increase special additional excise duty and road and infrastructure cess each one by 1 rupee a litre on petrol and diesel," Sitharaman said during her Budget 2019 speech. Highlights of Union Budget 2019.
While Re 1 cess would be applied for road and infrastructure development, another Re 1 would be levied in form of excise duty hike.
The non-populist move comes amid fears of a global crude oil rate hike, due to the escalating tensions in Gulf of Oman where a military confrontation is feared between Iran and the United States.
Here's What Sitharaman Said on Petrol, Diesel Cess:
FM Nirmala Sitharaman: I propose to increase special additional excise duty and road and infrastructure cess each one by 1 rupee a litre on petrol and diesel pic.twitter.com/y9DoC5IGIX
— ANI (@ANI) July 5, 2019
Notably, petrol and diesel prices had spiralled to unprecedented level last year, peaking above per litre in Mumbai, whereas, diesel touched upto Rs 80-mark.
This prompted then Finance Minister Arun Jaitley to appeal the state governments to reduce excise duties. The move ended up scaling down the fuel prices by upto Rs 2.5 per litre.