Kerala cuts Re 1 on fuel prices from Friday

Fuel prices in Kerala are set to come down by Re 1 per litre after the CPM-led government decided on Wednesday to slash rates of tax levied in the state on petrol and diesel.

The government made the decision to slash the rates at a Cabinet meeting. The new prices will be effective from June 1, Chief Minister Pinarayi Vijayan told reporters.

Kerala levies 31.8% tax on the price of petrol and 24.52% on the price of diesel. The government will reduce taxes on petrol and diesel by 1.69% and 1.75%, respectively. The move is set to cost the state Rs 509 crore in annual tax revenue at a time it is facing financial constraints, the chief minister said.

Kerala is the first state to respond to the recent spike in fuel prices with an initiative of its own to reduce the prices. Vijayan said the Centre had not responded to requests from across the country seeking a cut in fuel prices.

“The prices can’t continue to soar like this. The decision to reduce prices at the state level is a message being sent out to the Centre, saying this is what we have done about the crisis and also asking the Centre what it would do (to bring down the prices),” he said.

The Indian Oil Corporation, in its website, recorded petrol and diesel prices in Thiruvananthapuram on Wednesday as Rs 82.61 and Rs 75.19, respectively.

Finance Minister T M Thomas Isaac said Kerala, being a consumer state, suffered the most from fuel price hikes.

“Requests to the Centre seeking a reduction in prices have become pointless. It shouldn’t be a surprise if prices go beyond Rs 100 per litre. It’s in these circumstances that the state government decided to extend relief to the people, though there are financial constraints,” Isaac said.

Isaac reiterated that petrol price in the state had increased since the BJP-led government took charge at the Centre in 2014, only in proportion with the excise duty hike (from Rs 9.2 per litre to Rs 19.48 per litre) imposed by the Centre between 2014 and 2018.