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.

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.”

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.