The Hindu : Karnataka / Bangalore News : State to net Rs. 360 cr. through fuel price hike

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Sunday, Jun 26, 2011
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Karnataka

Karnataka - Bangalore

State to net Rs. 360 cr. through fuel price hike

Special Correspondent

HYDERABAD: Even as the people are bracing themselves to bear the Friday's hike in prices of diesel, kerosene and LPG, the State government will earn an additional revenue of Rs.360 crore a year, according to official sources.

The latest hike comes after petrol price was increased by Rs.5 a litre in May, benefiting the State exchequer by Rs.240 crore additional tax revenue then.

Bonanza for State

With the State imposing a VAT of 33 per cent on the petroleum products, stated to be the highest in the country and 22.5 per cent on diesel, overall the State revenues would go up by Rs.600 crore a year with the latest hike. This ironically becomes a bonanza for the State even as its people struggle to cope with the spiralling impact of frequent hike fuel costs.

Monthly consumption

Official sources said that the diesel consumption in the State was about five lakh litres a month while that of petrol was 1.23 lakh litres. Though the sources claim that with every round of price hike, there would be decline in the consumption, the tax revenue from the petroleum products continues to grow by an average 24 per cent.

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