The Karnataka government has announced an increase in the cess on petrol and diesel, leading to a rise in fuel prices.
The new rates, effective immediately from June 15, will impact consumers across the state as the government revised sales tax on both the fuels by 29.84 percent and 18.44 percent, respectively.
The Congress-led Karnataka became the first state to increase petrol diesel prices after general elections.
A state government notification issued today said the Karnataka Sales Tax (KST) has been raised from 25.92 percent to 29.84 percent on petrol and from 14.3 percent to 18.4 percent on diesel.
According to the Petroleum Dealers Association, petrol and diesel prices are likely to go up by Rs 3 and Rs 3.05 approximately in Karnataka.
Post the hike, petrol now costs Rs 102.86 per litre in Bengaluru, while diesel is priced at Rs 88.94 per litre.
In Bengaluru, petrol was being sold at Rs 99.84 per litre, while diesel was priced at Rs 85.93 per litre.
The last revision in fuel prices was done in November 2021, when the previous BJP government reduced petrol prices by Rs 13.30 per litre and diesel prices by Rs 19.40 per litre to help revive the economy after the Covid-19 pandemic.
The decision by the Finance Department of Karnataka aims to generate additional revenue for the state. However, it is likely to have a ripple effect on various sectors, including transportation and goods distribution, potentially leading to increased costs for consumers.
In March this year, the Centre had reduced petrol and diesel prices by Rs 2 per litre. It was the first nationwide fuel price cut since May 2022.
The decision by Karnataka comes hours after the Centre reduced windfall tax on domestically produced crude oil from Rs 5,200 per tonne to Rs 3,250 per tonne, PTI reported. The tax is levied in the form of Special Additional Excise Duty (SAED). SAED on export of diesel, petrol and jet fuel or ATF, has been retained at ‘nil’.
The government had first imposed windfall profit taxes on July 1, 2022, joining a host of nations that tax supernormal profits of energy companies.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
