BANGALORE: Despite the cut in fuel prices, consumers in Karnataka will pay the highest fuel prices when compared with those in neighbouring States, mainly due to the five per cent entry tax.

For instance, after the price revision on Wednesday, a litre of diesel costs Rs. 36.39 and petrol Rs. 52.92 in Bangalore, while the price is Rs. 34.41 for diesel and Rs. 49.67 for petrol in Chennai.

The pre-revision prices of diesel and petrol in other neighbouring States were Rs. 36.22 and Rs. 53.28 in Hyderabad, Rs. 35.93 and Rs. 49.61 in Panaji and Rs. 35.94 and Rs. 50.34 in Thiruvananthapuram. The prices are set to come down by Re. 1 and Rs. 2 from midnight on Wednesday.

Though diesel price in Maharashtra is around Rs. 37 (except Brihanmumbai area) after the revision, it is set to come down to around Rs. 35 from December 1.

The Maharashtra Government recently announced reduction in sales tax by 10 per cent.

Apart from burdening consumers, the higher price of fuel in Karnataka drives the business out of the State, according to the president of Petroleum Dealers' Association of Karnataka Bhushan Narang.

A senior official in the Indian Oil Corporation (IOC) said the average consumption of diesel in the State was around two lakh kilolitres a month. According to the existing rate of tax, oil companies pay Rs. 8,500 towards sales tax for every kilolitre. In effect, they contribute around Rs. 17 crore a month to Karnataka's exchequer.

The IOC official said the five per cent entry tax levied by the State Government was the reason behind high fuel prices in Karnataka.

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