P Chidambaram, Congressman, on Fuel Price Cuts: "I Stand Corrected"

P Chidambaram, a former Union minister, declared on Sunday that the circumstances surrounding the federal government's petrol price tax drop are "contrary" to what he previously asserted. Union Finance Minister Nirmala Sitharaman announced an excise duty reduction of Rs 8 per litre on petrol and Rs 6 per litre on diesel on Saturday to help bring down rising fuel prices caused by an increase in international crude oil prices owing to Russia's war in Ukraine.

"The notification of the duty reduction on gasoline and diesel is currently accessible. Although FM used the term "excise duty," the reduction is in Additional Excise Duty, which is not shared with states. As a result, contrary to what I mentioned yesterday, the Centre bears the whole responsibility of the cut. To that extent, I accept my apologies "According to Chidambaram.

The states receive very little in terms of share of duties on gasoline and diesel, he added, stressing that their primary source of revenue is VAT on gasoline and fuel. "I'm not sure they can afford to give up that revenue unless the Centre gives them extra money or grants," says the author "According to Chidambaram. He compares the scenario to being trapped between the devil and the deep water.

Chimbaram had previously stated that the finance minister's exhortation to states is "meaningless" because the states own 41 paise of a rupee in "central excise." "This means the Centre has slashed 59 paise and the States have slashed 41 paise." So, no finger pointing," he remarked on Twitter. "The genuine savings will come from the Centre's cess on gasoline and diesel (which is not shared with the states)."

Meanwhile, a slew of political responses greeted the announcement. On Sunday, the Tamil Nadu government called the Centre's reduction in petroleum-related taxes "partial," adding that "it is not fair nor realistic to expect States to lower their taxes."

"It's worth noting that the Union never consulted the states when it increased gasoline and diesel levies many times." The Union Government's outrageous tax increases have only been slightly mitigated by their cuts, and taxes remain high when compared to 2014 rates." "As a result, expecting states to decrease their taxes is neither fair nor rational." "In reaction to Union Finance Minister Nirmala Sitharaman's announcement of a historic reduction in excise duty on petrol of Rs 8 per litre and diesel of Rs 6, he said in a statement.