Oil companies slap hidden hike in petrol base price

THIRUVANANTHAPURAM: A hidden increase in the base price of petrol by oil companies has deprived consumers of the full benefits of the tax cut announced by the Central government. On Saturday, the Central government slashed petrol tax by Rs 8 per litre and the subsequent decrease in the sales tax imposed by the state government is Rs 2.41. Together, the customer should have got a benefit of Rs 10.41 per litre. But the prevailing price in Kerala is less than Rs 9.40 per litre of the previous price.

Finance Minister K N Balagopal on Monday said the reason was an increase in the base price of petrol by oil companies. “If the Centre allows such price increases frequently, the relief from tax cut will be fully compensated within a month,” he said. However, the tax cut on diesel was passed on to the consumers fully. The excise duty cut announced by the Centre was Rs 6 and the subsequent decrease in the sales tax was Rs 1.36. After the cut, the diesel price has come down by Rs 7.36 in the state.

Meanwhile, the state government has rejected the demand by the Opposition to make a matching cut in the Kerala General Sales Tax levied on petrol and diesel. The state government is levying 30.08 pc KGST on petrol and 22.76 pc on diesel. The value on which this tax is levied is the basic fuel price plus excise duty and transportation charges. 

Apart from this, an additional sales tax of Rs 1 per litre is levied on both petrol and diesel. Also, 1 pc cess is levied on the sales tax and AST amounts. The last revision in KGST was in June 2018 when petrol tax was reduced from 31.80 pc to 30.08 pc and diesel tax from 24.52 pc to 22.76 pc.