Karnataka government hikes petrol and diesel prices
Fuel prices in Karnataka have surged by around ₹3 per liter following a tax increase on petrol and diesel implemented by the state government. The Karnataka Sales Tax (KST) has been raised from 25.92% to 29.84% for petrol and from 14.3% to 18.4% for diesel, as per a state government notification issued on Saturday. Consequently, the prices of petrol and diesel have risen by ₹3 and ₹3.02 respectively, according to the Akhila Karnataka Petroleum Dealers Association.
Fuel price adjustment confirmed by Petroleum Traders Federation
In Bengaluru, the revised price of petrol is now ₹102.86 per liter, while diesel is priced at ₹88.94 per liter. The president of the Akhila Karnataka Federation of Petroleum Traders, KM Basavegowda, confirmed the price adjustment, stating, "We received the notification in the afternoon, and around 5,000 dealers across the state recalibrated digital displays of prices according to the revised fuel prices."
Fuel price hike to fund state government guarantees
The recent fuel price hike follows a revision in November 2021 when the previous Bharatiya Janata Party (BJP) state government reduced petrol and diesel prices to revive the economy post-COVID-19. The current increase is expected to help fund five guarantees implemented by the Congress-led state government, costing between ₹50,000 crore to ₹60,000 crore annually. A senior finance department official stated that this increase in fuel prices will help mobilize around ₹2,500-₹2,800 crore in this financial year.
State guarantees benefit over five crore people
The five guarantees implemented by the Congress government include free travel for women in non-AC state-run buses, 200 units of free power per month, and a monthly stipend of ₹2,000 for each female head of the family. The rest are the monthly provision of 10kg of food grains to families below the poverty line and monthly allowances for unemployed graduates and diploma holders. These guarantees benefit approximately 5.10 crore people in Karnataka and cost the exchequer ₹36,000 crore in 2023-24.
Additional revenue measures for state guarantees
To further generate revenue for these guarantees, the state government has implemented additional measures. These include increasing the guidance value of properties by 15-30%, imposing additional excise duty on Indian-made liquor and beer, levying extra cess on newly-registered transport vehicles, introducing a lifetime tax on electric vehicles priced above ₹25 lakh, and intensifying tax collection efforts.
