Row Sparks As Karnataka Hikes Petrol, Diesel Price: Is Fuel Costlier In Bengaluru Than Other Cities?

The ruling party of India, BJP and the opposition clashed after Karnataka hiked the prices of petrol and diesel for local citizens. With effect from June 15, petrol and diesel prices are increased by approximately Rs 3 each. This sparked the call for state-wide protest from the state's BJP party, while the chief minister Siddaramaiah defended the government's action saying the price hike in Karnataka is still lower compared to other states.

BJP party members took a jibe at Karnataka's ruling party, Congress after the hike in fuel prices which is likely to dent citizens' pockets.

Union Minister of Petroleum and Natural Gas, Hardeep Singh Puri in an interview with ANI told in the matter that "The price of petrol and diesel at the bunk is determined in large part due to the international prevailing price because we import 85% of our requirements of crude oil. I have done some statistics, between 2004 and 2014 the price of petrol and diesel in Bengaluru went up by 84%. This is during the Congress time and in diesel, it went up by 111%."

Hence, he told the reporters that Bharat is the only country, where prices of petrol and diesel over a representative period have come down. He mentioned that in the case of petrol, prices are down by about 2% or so, and in the case of diesel by a little per cent instead of going up.

As per Puri, PM Modi reduced the excise duty levied by the Centre on two occasions, November 21 and May 2022. This led to a reduction in VAT by all states under the BJP party.

The reason why the Karnataka government hiked petrol and diesel prices is due to a hike in sales tax of petroleum products by 29.84% on petrol and 18.44% on diesel, from earlier 25.92% and 14.34%.

Before going into the details of what is the current price in Bengaluru and comparing it with other states, India's common citizens must understand the factors that influence fuel prices.

Calculation of Fuel Prices:

At the top of the list is international crude oil prices as India has adopted daily revisions in petrol and diesel, linking it with the movement of international prices.

Second is exchange rates, with the Indian rupee's performance against other currencies especially in comparison to the dollar may play a role in the modification of fuel prices.

Thirdly which also holds an important chunk in the fuel prices is Value Added Tax (VAT) and excise duty. Unlike, VAT which is decided by the state government, the excise duty is fixed by the central government aka currently by the BJP government which is applicable across India. VAT is different for every state and hence is different in Karnataka as well.

Lastly, there are charges such as dealers' commissions, transport costs, and other subsidies.

Taking into consideration the VAT figures, Puri explained that the difference in price between Itanagar and Chennai is Rs 9.90 for petrol, between Lucknow and Telangana, is Rs 12.76, between Gandhinagar and Bengaluru, is Rs 8.21, between Panaji and Kerala, is Rs 12.35, between Guwahati and Kolkata, is Rs 6.80.

He lastly said, "Between 2004 and 2014, Congress introduced petrol bonds. They floated Rs 1.41 lakh crores and today we are having to pay back Rs 3.20 lakh crores..."

Further, former deputy chief minister Dr C N Ashwath Narayan called out for a state-wide strike in Karnataka until prices were brought down. He said that ever since Congress took the regime in Karnataka which was 13 months ago, they have been busy finding newer ways to burden the common man in the region.

On the other hand, Karnataka CM Siddaramaiah, a member of the Indian National Congress Party, defended the government's decision. He told ANI " We have raised sales tax by Rs 3, both on petrol and diesel. Still, we are less than the rates that our neighbouring states have. The BJP people are making it an issue for political reasons."

Siddaramaiah clapped back at BJP saying to the news agency, "When Narendra Modi ji raised additional excise duty on petrol and diesel, they kept quiet. More than 10 times, they have raised it... Our share in the tax devolution, from the 14th finance commission to the 15th finance commission, we lost about Rs 1,87,00,000 crores. Why these people are keeping quiet about it?... For developmental works, we are raising the resources."

Petrol, and Diesel Prices In Bengaluru:

Effective from June 15, petrol price is up by Rs 3.02 in Bengaluru to Rs 102.86 per litre compared to the earlier price of Rs 99.84 per litre. In the case of diesel, the price is increased by Rs 3.01 to Rs 88.94 per litre as against Rs 85.93 per litre.

Compared to a few metro cities, prices of petrol and diesel are cheaper than in Bengaluru.

For instance, currently, in the national capital New Delhi, petrol is at Rs 94.72 per litre, in Chandigarh at Rs 94.24, in Bhubaneswar at Rs 100.97, in Lucknow at Rs 94.56, and in Gurgaon at Rs 94.90.

While diesel is also cheap in Delhi where per litre is Rs 87.62, in Lucknow at Rs 87.66, and in Chandigarh where the price is Rs 82.40 per litre.

However, that is not the case with all over India. Some cities sell petrol and diesel at a much higher rate than Bengaluru. These are:

In petrol, the price is Rs 104.21 per litre in Mumbai, Rs 103.94 in Kolkata, Rs 105.18 in Patna, and Rs 107.56 in Trivandrum of Kerala.

And in diesel, the price is at Rs 92.15 per litre in Mumbai, Rs 90.76 in Kolkata, Rs 92.04 in Patna, and Rs 96.43 in Trivandrum among others.

Notably, Karnataka hiked petrol and diesel prices despite the central government lowering windfall taxes to Rs 3,250 per tonne on domestically produced crude oil with effect from June 15. The windfall earlier was at Rs 5,200 per tonne.