The Karnataka government on Friday raised the rate of sales tax on petrol and diesel to 32% and 21% respectively. Petrol will cost Rs 70.8 per litre while diesel will cost Rs 64.6 as the increase in the rates will come into immediate effect. The prices of petrol and diesel was Rs 69 and 62.8 on Friday.
The government cited revenue loss for the state due to the drop in crude oil prices in the international market as the reason for the increase in the rates.
The CM office clarified in a note that despite the revision of prices, the price of petrol in the state remained lower than neighboring states The price of petrol is Rs 72.87 in Tamil Nadu, Rs 71.16 in Kerala, Rs 72.63 in Andhra Pradesh and Rs 74.06 in Maharashtra.
The note also added that the union government had reduced central excise on petrol and diesel by Rs 1.50 on October 5, 2018 and also directed oil marketing companies to reduce their margins by Re 1.
The decision by the JD(S)-Congress coalition government is set to have an adverse effect as the Congress party continues its repeated attacks on the central government over rising fuel prices in the country.
This is the third time the coalition government is making a change in the sales tax on petrol and diesel. The government had previously increased sales tax on petrol and diesel from 30 to 32% and 19 to 21% respectively in July 2018, two months after it came into power. The tax was raised in part to help fund the ambitious farm loan waiver scheme laid out by the coalition government.
However, on September 17, 2018, it reduced the price of petrol by Rs 2 per litre. The reduction came at a time the Congress was putting pressure on the central government over the rising fuel prices in the country.