The government of India has finally pitched in to cut down the prices of fuel in India by cutting the excise on petrol and diesel. The Finance Minister, Arun Jaitley briefed the media today and announced the government's decision to cut the excise duty on fuel prices both petrol and diesel by Rs 1.50 per litre with immediate effect.

Apart from this, the oil marketing companies in India have been asked to bear the remaining burden of Re 1 per every litre and with this, the customers will get a relief of Rs 2.50 per litre on both petrol and diesel. The move is going to cost the exchequer about Rs 10,500 crore, which will stand at 0.05 percent of the fiscal deficit. The government has upped its ante and steps has been taken to cut down on the borrowing by Rs 70,000 crore and it has allowed OMCs to raise $10 billion.

He also noted that the oil marketing companies are fully competent to deal with the decision and the government was not going back on fuel price deregulation.

The shares of Indian oil marketing companies tumbled after Finance Minister announced the decision to cut down the fuel prices to the tune of Rs 2.50 per litre.

The shares of Indian oil marketing companies sank after the announcement, with Indian Oil Stocks down by 18.24 percent, HPCL stocks tumbled by 22 percent and BPCL stocks declined by 19 percent.

The oil industry is currently facing volatility amid the return of U.S. sanctions on Iran added with OPEC member countries inability to meet the growing global oil requirements. Brent crossed $86 per barrel and this is the highest in the last four years.

Added to this, the U.S. Fed has hiked interest rates for three times till date during current fiscal and is all set to announce another hike in December. The strong U.S. economy added with the mighty dollar has widened the current account deficit of India and it has also impacted significantly on the emerging markets across the globe. As a measure to curb the growing menace, the government has finally stepped in by trimming down the excise duty on fuel prices to bring in relief to the end users.