In a move to address its financial challenges, the Punjab government has raised fuel prices and discontinued electricity subsidies for users with higher power loads. On Thursday, the state increased petrol prices by 61 paise per litre and diesel by 92 paise per litre. Additionally, the government has revoked the power subsidy for households with electricity loads above 7 KW.
The decisions were made during a Cabinet meeting chaired by Chief Minister Bhagwant Mann. The government explained that these steps aim to boost state revenue by approximately Rs 1,500 to 1,700 crore annually.
Fuel Price Hike to Generate Revenue
Finance Minister Harpal Cheema highlighted that the rise in fuel prices alone would generate Rs 392 crore annually for the state. Despite the hike, the government will continue to provide free electricity of up to 300 units per month to 90% of domestic consumers, a policy in place since 2023. The agricultural sector will also continue to receive free electricity.
Subsidy Revoked for High Power Users
One of the major changes involves scrapping the subsidised electricity scheme for those with loads exceeding 7 KW, which was introduced by the previous government. This decision is part of a broader effort to generate additional revenue for the state.
Impact on Essential Goods
Critics argue that the rise in fuel prices could lead to an increase in the cost of essential commodities, which are already high in Punjab. This could put further pressure on consumers as fuel costs often have a ripple effect on the broader economy.
Monty Sehgal, a spokesperson for the Petrol Pump Dealers Association Punjab, expressed concern about the government's repeated hikes in fuel prices, stating, "This is the third increase in two years, which is harming the petroleum trade." He suggested that the government should reduce VAT on green fuels like CNG to promote their use over diesel.
Before the hike, petrol prices in Jalandhar were Rs 96.17 per litre, and diesel was priced at Rs 86.32 per litre.
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