Siddaramaiah defends hike in fuel prices; urges Centre to reduce excise duty on petroleum products
A day after the State government hiked petrol and diesel prices by about ₹3 each, Chief Minister Siddaramaiah defended the hike and blamed the Centre for forcing the State to cut sales tax during the earlier years, while it continued to increase the Central excise duty on petroleum products.
In a note, he said that while under the “double engine BJP government” Karnataka was forced to reduce the tax, the Union government continued to collect higher Central excise duty from the State, and diverted the resources to other States. This had affected Karnataka’s tax collection ability and had betrayed Kannadigas, he alleged.
The Chief Minister explained that the then BJP government imposed sales tax of 35% on petrol and 24% on diesel in April 2021. “After the Centre reduced taxes, the State also reduced tax on petrol to 25.92% and on diesel to 14.34%. However, neighbouring Kerala, Maharashtra, Telangana, Andhra Pradesh, and Tamil Nadu did not reduce the tax.”
On Saturday, the State government increased the sales tax on petrol and diesel by 3.92% and 4.1%, respectively, which resulted in an increase in petrol and diesel prices by about ₹3 each.
The current prices of petrol and diesel in Bengaluru are ₹102.86 and ₹88.94, respectively. In 2023-2024, Karnataka consumed about 53.43 lakh kilolitres of petrol and 1.11 crore kilolitres of diesel. Annually, the State collects about ₹20,000 crore as tax on petrol and diesel, and the hike will provide at least ₹500 crore more annually.
Mr. Siddaramaiah pointed out that since 2014, the Centre increased the duty from ₹9.48 to ₹32.98 per litre of petrol, and from ₹3.56 to ₹31.83 per litre of diesel. “Subsequently, the excise duty on petrol and diesel was cut by ₹13 and ₹16 per litre, respectively, between November 2021 and May 2022. Despite the reductions, the current Central excise duty on petrol is ₹19.9 and on diesel is ₹15.8 per litre. We urge the Centre to reduce it for the benefit of the people.”
‘Still cheaper than neighbouring States’
Stating that the hike had no relation to the Lok Sabha elections results, he said that despite the increase, petrol and diesel continue to be cheaper in Karnataka than neighbouring States.
“There is no link between the hike and the election results. Winning and losing is part of a democracy. We have not won the expected number of seats in Karnataka but have improved our vote share,” the Chief Minister told presspersons in Vijayapura.
He was responding to an allegation by Leader of the Opposition in the Assembly R. Ashok that the government increased the fuel price in revenge for the Lok Sabha electoral losses.
After the hike came into effect on Saturday, Mr. Siddaramaiah said that petrol price in Karnataka is equivalent to the prevailing price in Tamil Nadu, while cheaper than that of Kerala, Telangana, and Andhra Pradesh. He added that petrol is cheaper in Karnataka than in the BJP-ruled Rajasthan and Madhya Pradesh, where the price is ₹104.86 and ₹106.47 per litre, respectively.
“Our tax on fuel remains lower than most south Indian States and similar economy-sized States like Maharashtra.”
Responding to Union Heavy Industries and Steel Minister H.D. Kumaraswamy, who said the cost of petrol has become the highest in the history of Karnataka, the Chief Minister said sales tax on petrol was 35% during the tenure of Mr. Kumaraswamy as Chief Minister.
In a statement, Mr. Siddaramaiah said that government was committed to ensuring that citizens are not burdened with the hike.
“The additional money from the hike will be utilised to improve basic infrastructure and on development projects,” he added.
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