Fuel price cut: How much will it cost the government exchequer?

The Centre’s Diwali gift for the aam aadmi in the form of lower excise tax on fuel will cost the exchequer Rs 45,000 crore for the remaining of this fiscal as lost revenue, or 0.2 per cent of gross domestic product (GDP), according to a note by brokerage Nomura.
The tax cuts—Rs 5 per litre for petrol, and Rs10 per litre for diesel— aimed at helping farmers, manufacturers, and transporters, who have been unnerved by the steep price rises, could cost the government Rs one lakh crore (0.45 per cent of GDP) on an annual basis in terms of lost revenues.
“The tax cuts could cost the government Rs 1 trillion (0.45 per cent of GDP) on an annual basis in terms of lost revenues and around Rs 45,000 crore (0.2 per cent of GDP) for the remaining months in FY22,” the note said.