Bangalore: Fuel prices in Karnataka have surged by Rs 3 following the state government's decision to hike the sales tax on petrol and diesel, effective June 15. This move comes shortly after the Congress party, which campaigned in the recent Lok Sabha elections on the promise of reducing inflation, secured a victory.

The state government's notification on Saturday indicated that the Karnataka Sales Tax (KST) on petrol has been increased from 25.92 percent to 29.84 percent, and on diesel from 14.3 percent to 18.4 percent. As a result, the prices of petrol and diesel per litre have risen by Rs 3 and Rs 3.02, respectively. In Bengaluru, petrol now costs Rs 102.86 per litre, while diesel is priced at Rs 88.94 per litre.

KM Basavegowda, president of the Akhila Karnataka Federation of Petroleum Traders, confirmed that around 5,000 dealers across the state recalibrated their dispensers to reflect the new prices immediately after receiving the notification.

This price hike follows the Congress-led state government’s commitment to fund five major welfare guarantees, requiring an annual expenditure of Rs 50,000 crore to Rs 60,000 crore. A senior finance department official stated that the increased fuel prices are expected to generate an additional Rs 2,500-Rs 2,800 crore this financial year. Despite the hike, fuel prices in Karnataka remain lower than in neighboring states.

The last fuel price revision was in November 2021, when the previous BJP-led state government reduced petrol prices by Rs 13.30 per litre and diesel prices by Rs 19.40 per litre to aid economic recovery post-Covid-19.

The revenue collection slowdown due to the Lok Sabha election model code of conduct from March 14 to June 4 prompted Chief Minister Siddaramaiah to review revenue targets and implement measures to boost income. Besides increasing fuel taxes, the Congress-led government has raised the guidance value of properties by 15-30 percent, imposed an additional excise duty on Indian-made liquor, increased excise duty on beer, added a 3 percent cess on newly-registered transport vehicles, and introduced a lifetime tax on EVs priced above Rs 25 lakh.

The government's five welfare guarantees, benefiting 5.10 crore people, include free travel for women in non-AC state-run buses, 200 units of free power per month, a Rs 2,000 monthly allowance for female heads of families, 10 kg of food grains per month for BPL families, and monthly stipends for unemployed graduates and diploma holders. The total allocation for these schemes is Rs 52,009 crore 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 and annual borrowings exceeding Rs 1 lakh crore for the first time. This discrepancy between the Congress party's pre-election promises and post-election actions highlights a significant gap between their words and deeds.

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