Why Is There A Petrol Price Hike In Karnataka?

For the unversed, in March 2024, the government had slashed the petrol and diesel prices by Rs. 2 per litre and it was the first time it happened since May 2022. Read on to know the details

Following the state’s revision of the sales tax on Saturday, the cost of petrol and diesel has increased in Karnataka. The government changed the sales tax on petrol and diesel by 18.44% and 29.84%, respectively.

According to the Petroleum Dealers Association, Karnataka’s petrol and diesel prices will likely increase by 3 and 3.05, respectively, as reported by ANI. The cost of petrol has increased by 3, with Bengaluru now charging Rs. 102.84 per litre instead of Rs. 99.84.

In a similar vein, diesel now costs ₹3.02 more per litre than it did a year ago, at Rs. 85.93. It now stands at 88.95. A rider on the increasing price stated, “Where will we go when the rich can afford petrol? I’m employed at a BPO. I’ll need to buy petrol with my 15,000 salary. We will be greatly impacted by this.”

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Why Has The Petrol Price In Karnataka Increased?

The Karnataka Finance Department’s move is intended to bring in more money for the state. On the other hand, it might have a knock-on effect on a number of industries, such as transportation and the distribution of goods, and might result in higher prices for consumers.

Karnataka made its decision just hours after the federal government lowered the windfall tax on crude oil produced domestically from ₹5,200 per tonne to ₹3,250 per tonne.

Special Additional Excise Duty (SAED) is the tax imposed. SAED on the export of petrol, diesel and aviation turbine fuel, or ATF, has remained at ‘nil’. On July 1, 2022, the government implemented windfall profit taxes for the first time, following a number of other countries that levy taxes on energy companies’ supernormal profits.

Every two weeks, the average oil price over the preceding two weeks is used to reevaluate the tax rates.

For the unversed, in March 2024, the government had slashed the petrol and diesel prices by Rs. 2 per litre and it was the first time it happened since May 2022. On May 21, 2022, the Centre had cut the excise duty on petrol and diesel, going Rs. 8 per litre and Rs.6 per litre respectively.

The Centre cut May 21, 2022. Nirmala Sitharaman, the Finance Minister, stated that the government will lose almost ₹1 lakh crore in revenue as a result of the decision.

BJP Criticizes The Surge In Petrol Prices In Karnataka

BJP spokesperson S Prakash on the matter stated, “Siddaramaiah-led Congress government has steeply increased diesel and petrol prices in this state. Soon after the Parliament elections are over, this hike has been brought.”

He continued, “People were expecting Rs 8500 khatakhat in their bank accounts as promised by Rahul Gandhi. On the contrary, they have been hugely burdened by the increase in petroleum products. This is an outcome of guarantee schemes pursued by the State Govt. The State Govt is financially bankrupt, they are trying to extract revenue from whatever is available.”

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