Karnataka's Fuel Prices Rise but Stay Lower than Neighbouring States

In a recent development that has stirred the local economy, the Congress-led Karnataka government announced an increase in the local tax on auto fuels, propelling petrol prices above Rs 100 per litre and diesel to Rs 89. This adjustment came into effect on June 15, with the local VAT (Value Added Tax) on petrol rising from 25.92 per cent to 29.84 per cent, and on diesel from 14.3 per cent to 18.4 per cent. Consequently, petrol now costs Rs 102.86 per litre and diesel Rs 88.94 per litre in Bengaluru.

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Despite this hike, Karnataka's fuel prices remain lower than those in neighbouring Andhra Pradesh and Maharashtra, where fuel costs are among the highest in the country. Andhra Pradesh, governed by the TDP-BJP alliance, has the most expensive petrol at Rs 109.87 per litre. Kerala and Telangana follow closely, with petrol prices at Rs 107.54 and Rs 107.39 per litre, respectively.

Other states with petrol prices exceeding Rs 100 include Odisha, Tamil Nadu, and Chhattisgarh. Diesel prices tell a similar tale, with Andhra Pradesh leading at Rs 97.6 per litre, followed by Kerala and Telangana.

Oil Minister Hardeep Singh Puri recently highlighted the disparity in fuel prices between Karnataka and BJP-ruled states like UP and Gujarat. He criticized the Karnataka government for imposing higher taxes on petrol and diesel, suggesting this would lead to increased costs for essential goods due to the direct impact of fuel prices on commodities.

Puri pointed out that petrol in Karnataka is now significantly more expensive than in BJP-governed UP and Gujarat. He also compared Karnataka's fuel prices with those in Arunachal Pradesh, noting a substantial difference.

The minister credited the NDA government's strategic diversification of India's crude oil purchases for a decrease in petrol and diesel prices by about 14 per cent and nearly 11 per cent, respectively, during November 2021 - May 2024. This was contrasted with global trends where countries like the US saw a surge in petrol prices by 29 per cent.

To combat inflationary pressures and maintain affordability of transport fuels, the Modi government implemented significant excise duty cuts in November 2021 and May 2022. These measures were complemented by further price reductions by Oil Marketing Companies (OMCs) in March this year.

Puri also highlighted that BJP-run state governments have aligned with these pro-people policies by reducing sales tax on transport fuels to further alleviate financial burdens on the public.