Petrol, Diesel Prices Up in Karnataka Post Tax Increase
India’s latest fuel prices for petrol and diesel were announced on Sunday, June 16, following a substantial tax hike by the Karnataka state government led by Congress’ Siddaramaiah. This measure, intended to boost state revenue, has resulted in a ₹3 per litre increase in petrol prices, bringing the cost in Bengaluru to ₹102.84, up from ₹99.84. Diesel prices have similarly risen by ₹3.02 per litre, now costing ₹88.95, up from ₹85.93. The state’s sales tax on petrol has increased from 25.92% to 29.84%, and on diesel from 14.3% to 18.4%.
The increase in sales tax has had an immediate impact on the retail prices of petrol and diesel throughout Karnataka. This hike is likely to affect several sectors, particularly transportation and goods distribution, potentially resulting in higher costs for consumers. The Petroleum Dealers Association noted that the price increase was in direct response to the state’s decision on June 15.
Chief Minister Siddaramaiah defended the price hike, asserting that even with the new rates, Karnataka’s fuel prices are still lower than those in neighboring states. This came as the BJP announced statewide protests set for June 17. Siddaramaiah explained, “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 pointed out that despite the increase, Karnataka’s fuel prices are still lower than in states such as Gujarat and Madhya Pradesh. He also criticized the previous BJP administration for reducing VAT on fuel while the Central government raised its own taxes, thereby reducing state revenue. Siddaramaiah urged the central government to lower its taxes to help the public. The central government had ended a two-year freeze on retail fuel prices on March 15, 2024, leading to a nationwide reduction of ₹2 per litre for petrol and diesel.
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