The State government has increased sales tax on petrol and diesel by 3.92% and 4.1%, respectively, with effect from Saturday, making both fuels costlier by about ₹3.
In Bengaluru, the price of petrol will go up from ₹99.84 to ₹102.86 and diesel from ₹85.93 to ₹88.94.
The decision has drawn widespread criticism, and the BJP has announced a protest against the hike on Monday. Many BJP leaders took to social media to slam the Congress government for hiking prices to fund its flagship guarantee schemes and for alleged poor financial management.
On November 4, 2021, the BJP government had reduced the tax rates on petrol to 25.92% and on diesel to 14.34%. With the hike now, the rates are 29.84% for petrol and 18.44% for diesel.
Additional revenue
Sources in Commercial Tax Department said that the hike in prices is likely to yield at least ₹500 crore more annually. In 2023-2024, Karnataka consumed about 53.43 lakh kilo litres of petrol and 1.19 crore kilo litres of diesel. Currently, about ₹20,000 crore is collected annually on sales tax on petrol and diesel in the State.
The sources said that even after the hike, the cost of petrol and diesel is low in Karnataka compared to neighbouring States. For instance, as on June 1, the cost of petrol in Hosur (in Tamil Nadu) is ₹102.84 and diesel ₹94.41.
The Janata Dal (S)-Congress alliance government, headed by H.D. Kumaraswamy, that had tried to increase the petrol and diesel prices in 2018 to fund the ambitious ₹25,000 crore farm loan waiver scheme had to roll back the decision after an uproar.
In the recent past, as petroleum prices increased, the State governments have stayed away from any upward revision of the tax, while blaming the Centre for the high cost.
