New Delhi, May 5: The Centre on Tuesday increased excise duty on petrol and diesel by Rs eight per litre. The decision was taken by the Narendra Modi government in the backdrop of financial crisis emerging due to coronavirus lockdown. The government also raised the special additional duty on excise by Rs five on petrol and Rs two on diesel. This will make petrol dearer by Rs 10. The decision will come into effect from May 6. Nagaland Charges Cess of Rs 5 on Petrol & Diesel to Combat Financial Crisis Erupted Due to Coronavirus Lockdown.

Similarly, diesel will also become costlier by Rs 13 per litre. According to a report published in CNBC TV 18, the price hike will be absorbed by Oil Manufacturing Companies (OMCs), which will result in no increase in retail prices of fuel. After the lockdown, the fuel prices remained stable for almost 45 days. Liquor Prices Shoot Up in Delhi, Govt Levies 70% Tax as 'Special Corona Fees' on MRP to Mitigate COVID-19 Impact.

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Earlier in the day, Punjab and Delhi government also increased value-added tax (VAT) on the two auto fuels. The petrol prices in the national capital have increased by Rs 1.67/litre, while diesel rates have shot up by Rs 7.10/litre. In Punjab also, petrol and diesel will become more expensive by Rs two per litre. Nagaland was the first state to to levy cess on petrol and diesel to recover financial losses due to coronavirus lockdown.

Several financial agencies  predicted reverse economic growth for India due to the coronavirus lockdown. Last week, Moody's Investors slashed India growth forecast for the calendar year 2020 to 0.2 per cent, from 2.5 percent projected in March. For 2021, Moody's expects India's growth to rebound to 6.2 percent. In its report titled - Global Macro Outlook 2020-21 (April 2020 update), Moody's has lowered G-20 advanced economies as a group to contract by 5.8 percent in 2020.

(The above story first appeared on LatestLY on May 05, 2020 11:36 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).