Petrol and diesel prices will increase by Rs 3 as state government

Gasoline price

Bengaluru: Fuel prices in Karnataka rose by Rs 3 after the state government hiked sales tax on petrol and diesel on June 15, which came into effect immediately.

According to the state government’s notification on Saturday, the Karnataka Sales Tax (KST) has been increased from 25.92 percent to 29.84 percent on petrol and from 14.3 percent to 18.4 percent on diesel.

According to the Akhila Karnataka Petroleum Dealers Association, the prices of petrol and diesel per liter have increased by Rs 3 and Rs 3.02 respectively. In Bengaluru, the revised price of petrol is Rs 102.86 per liter while that of diesel is Rs 88.94 per litre.

The notice issued by the state’s Treasury Department on June 15 stated that the price increase would take effect immediately.

KM Basavegowda, president of Akhila Karnataka Federation of Petroleum Traders, told Moneycontrol, “We received the notification in the evening and around 5,000 dealers in the state have recalibrated the dispensers to reflect the revised fuel prices.”

The fuel price hike comes after the Lok Sabha polls, and the Congress-led state government has to spend Rs 50,000 crore to Rs 60,000 crore annually for implementation of five guarantees.

A senior finance department official told Moneycontrol that a hike in fuel prices will help mobilize around Rs 2,500 to Rs 2,800 crore this financial year. “Fuel prices in Karnataka are still lower than neighboring states.”

The last revision took place in November 2021, when the previous BJP-led state government reduced petrol prices by Rs 13.30 per liter and diesel prices by Rs 19.40 per liter to revive the economy post-Covid-19.

With revenue collection delayed between March 14 and June 4 due to the code of conduct of the Lok Sabha election model, Prime Minister Siddaramaiah, who also holds the finance portfolio, held a review meeting a few days ago and directed officials to review the revenue collection targets accomplish. .

To generate additional revenue to fund guarantees, the Congress-led state government had increased the guideline value of properties by 15-30 percent, imposed additional excise duty (AED) on Indian liquor (IML) by 20 percent on all plates and AED on beer . from 175 percent to 185 percent. The government also imposed an additional 3 percent tax on newly registered transport vehicles and introduced a lifetime tax on EVs (electric vehicles) above Rs 25 lakh.

The five poll guarantees implemented by the state government are: free travel for women across the state in non-AC state buses; 200 units of free electricity per month; Rs 2,000 per month for each female head of household; 10 kg of food grains (rice, ragi, jowar, millet) per month for BPL families (below poverty line); Rs 3,000 per month for two years for unemployed graduates; and Rs 1,500 per month for two years for unemployed diploma holders.

While these five guarantees will benefit 5.10 crore people in the state, costing the exchequer Rs 36,000 crore in 2023-24, Siddaramaiah allocated Rs 52,009 crore for the schemes in the current financial year.

Siddaramaiah’s revenue deficit budget for 2024-25 – his 15th budget – has a total outlay of Rs 3,71,383 crore. With a deficit of Rs 27,354 crore, this is likely to be the first time that annual borrowings have crossed Rs 1 lakh crore in a financial year.