New Delhi, Nov 3 (IANS): The Centre on Wednesday sweetened Diwali celebrations by announcing that it will slash excise duty rate on both petrol and diesel fuels, thus bringing down retail rates.

The excise duty will be reduced by Rs 5 for petrol and Rs 10 for diesel from November 4.

Domestic prices of both fuels have touched record highs on the back of a steep rise in crude oil cost.

Petrol has already breached the Rs 100 per litre mark and above in several cities, whereas, diesel is not far behind.

The rise in transport fuels had raised concerns over a build-up of inflationary pressure which has even concerned the RBI.

The Finance Ministry, in a statement on Wednesday night, a day before Diwali, said: "The reduction in excise duty on diesel will be double that of petrol. The Indian farmers have, through their hard work, kept the economic growth momentum going even during the lockdown phase and the massive reduction in excise on diesel will come as a boost to the farmers during the upcoming Rabi season."

"In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure. The world has also seen shortages and increased prices of all forms of energy."

As per the statement, the Centre has made efforts to ensure that there is no energy shortage in the country and that commodities such as petrol and diesel are available adequately to meet requirements.

"Driven by the enterprising ability of India's aspirational population, the Indian economy has witnessed a remarkable turnaround post the Covid-19 induced slowdown. All sectors of the economy - be it manufacturing, services or agriculture - are experiencing significant upward economic activity.

"To give a further fillip to the economy, the Government of India has decided to significantly reduce the excise duty on diesel and petrol."

In addition, the Centre urged state governments to commensurately reduce VAT on petrol and diesel.