The Opposition United Democratic Front (UDF) on Sunday stepped up pressure on the State government for further tax cuts on petrol and diesel, even as Finance Minister K.N. Balagopal argued that the demand hurt the interests of the State since the Centre was to blame for the unreasonable fuel prices.
Senior Congress leaders, including Leader of Opposition V. D. Satheesan, KPCC president K. Sudhakaran and Oommen Chandy, on Sunday demanded further cuts on the part of the State government. The LDF government should emulate the example of the Oommen Chandy government and forego additional tax revenue and ease the burden on the public, they said.
The LDF-UDF spat over fuel prices is on at a time when campaigning for the Thrikkakara bypoll is at its peak. Following the excise duty cuts announced by the Centre on Saturday, the sale tax collected by the State had correspondingly dipped by ₹2.41 on petrol and ₹1.36 on diesel.
Mr. Balagopal said on Sunday that Kerala had reduced a total ₹3.97 on petrol and ₹3.68 on diesel since November 2021, following the two tax cuts by the Centre. This should be seen as a conscious step by the State government, and not merely as a corresponding decrease, he said.
The LDF government had, in fact, slashed the tax rate on petrol from 31.80% to 30.08% and that on diesel from 24.52% to 22.76% in June 2018, Mr. Balagopal said. The government has not hiked the fuel tax even once in the past six years. On the other hand, the Centre had hiked Central taxes on petrol and diesel by ₹13.32 and ₹17.97 respectively in March and May, 2020. The present reduction has come from this hike.
Mr. Balagopal countered the UDF argument that the Oommen Chandy government had avoided additional tax revenues due to Central hikes on four occasions. It was the UDF government that raised the tax rate on petrol to 31.80% and that of diesel to 24.52% in February 2015, he said.
Mr. Satheesan said that since the Centre had only effected a nominal cut on Saturday, the State should announce a further reduction. Over the past six years, the State government had received additional tax revenues to the tune of ₹6,000 crore, he pointed out. While Mr. Balagopal claimed that the State government had not raised fuel taxes, the fuel tax revenue of the State had risen by 50%, K. Sudhakaran said.
Mr. Chandy said the UDF government had decided to forego a total of ₹619.17 crore in additional tax revenues when fuel prices went up. When the UDF came to power in May 2016, a litre of petrol and diesel prices were ₹64.16 and ₹54.78 respectively. It now stood at ₹105.76 and ₹94.69 respectively, Mr. Chandy said.
