Fuel Tax Hike in Karnataka: Petrol, Diesel Prices Surge

Fuel prices in India were updated on Sunday, June 16, following a notable tax increase by the Karnataka state government, led by Congress’ Siddaramaiah. This tax hike, aimed at raising additional state revenue, resulted in a ₹3 per litre increase in petrol prices, bringing the cost to ₹102.84 in Bengaluru, up from ₹99.84. Diesel prices also saw a rise of ₹3.02 per litre, now priced at ₹88.95, up from ₹85.93. The state’s sales tax on petrol was raised from 25.92% to 29.84%, and on diesel from 14.3% to 18.4%.

This tax increase has directly affected the retail prices of petrol and diesel across Karnataka. The hike is expected to impact various sectors, including transportation and goods distribution, potentially increasing costs for consumers. The Petroleum Dealers Association reported that the price rise followed the state’s tax decision on June 15.

Karnataka Chief Minister Siddaramaiah defended the fuel price hike, emphasizing that Karnataka’s fuel prices remain lower than those in neighboring states despite the increase. This defense came as the BJP announced plans for statewide protests on June 17. Siddaramaiah stated, “The Government of Karnataka has increased VAT on petrol to 29.84% and on diesel to 18.44%. Even after this hike, our state’s taxes on fuel remain lower than most South Indian states and similar economy-sized states like Maharashtra.”

He highlighted that despite the hike, Karnataka’s fuel prices are still lower than in states like Gujarat and Madhya Pradesh. Siddaramaiah also criticized the previous BJP administration for reducing VAT on fuel while the Central government increased its taxes, which reduced state revenue. The CM urged the central government to lower its taxes to benefit the public. The central government had lifted the freeze on retail fuel prices on March 15, 2024, leading to a reduction of ₹2 per litre in petrol and diesel prices nationwide.

Follow for more.