Even as the Karnataka government has hiked petrol and diesel prices by increasing value-added tax (VAT) on the fuel, Chief Minister Siddaramaiah on Sunday justified the recent VAT hike on petrol and diesel, saying Karnataka’s fuel rates are still lower than those in Maharashtra, Gujarat and Madhya Pradesh.

“In Maharashtra, the VAT on petrol is 25% plus Rs 5.12 additional tax, and on diesel, it is 21%. Karnataka’s revised rates are still more affordable. Despite the VAT hike, diesel prices in Karnataka are still lower than in Gujarat and Madhya Pradesh. We remain committed to keeping fuel prices reasonable for our citizens,” the chief minister said in a series of posts on X.

On Saturday, June 15, the Karnataka government hiked sales tax on fuel which will make petrol and diesel costlier. According to official sources, petrol will now go up by Rs 3 and diesel by Rs 3.5 per litre. In a notification issued by the Finance Department, the government has hiked sales tax on petrol by 3.92 percentage points, from 25.92 to 29.84 per cent. On diesel, the hike is 4.1 percentage points, from 14.34 to 18.44 per cent.

Defending the price hike, the chief minister in another post on X said Karnataka’s VAT adjustment ensures we can fund essential public services and development projects. The state remains committed to balanced and responsible governance.

In another post on X, Siddaramaiah said, “The then Double Engine BJP government collaborated to divert Karnataka’s resources to other states. The state BJP govt kept reducing VAT on petrol and diesel while the Central govt increased its own taxes. This manipulation led to reduced revenue for Karnataka, while the Central government collected more for its coffers, cheating Kannadigas.”

The central government had increased excise duty on petrol from Rs 9.21 to Rs 32.98 and on diesel from Rs 3.45 to Rs 31.84. These high taxes are a burden on our citizens, Siddaramaiah added.

“Despite subsequent reductions, the current central excise duty on petrol is Rs 19.9 and on diesel is Rs 15.8. We urge the Union Government to reduce these taxes for the benefit of the people,” he added.

The Karnataka goverment’s decision to hike petrol and diesel prices comes days after the Lok Sabha poll results, in which NDA got 19 out of 28 seats in Karnataka, with BJP winning 17 and JD(S) with 2. The ruling Congress in the state has won nine seats.

The move, aimed at resource mobilisation, comes after Chief Minister Siddaramaiah, who is also the finance minister, reviewed the state’s revenue generation and fiscal position.

During the meeting, the CM asked officials to work harder towards meeting revenue collection targets.

According to sources, the hike is expected to generate Rs 2,500-Rs 2,800 crore during the financial year.

Hitting out at the government, Karnataka BJP president B Y Vijayendra urged the chief minister to roll back the hike in petrol and diesel prices, as he threatened a state wide protest by the party on Monday, at all district centres.

“Faced by defeat in Lok Sabha polls, the chief minister is not ready to accept that the financial situation of the state has deteriorated, but the hike in fuel prices proves it. The government is unable to run the administration because of guarantees, they are unable to get proper resources….The government should withdraw this decision (of fuel price hike),” he said.

Leader of Opposition in the Karnataka Assembly R Ashoka said this “anti-people” Congress government is taking revenge on Kannadigas for voting BJP in the Lok Sabha elections.

“Having emptied the state’s coffers with its unscientific guarantee schemes the Congress government in Karnataka is going to fill the treasury by taxing the Kannadigas,” he posted on ‘X’, adding that with this hike the government has “cut” into the public pocket.

Siddaramaiah has set aside Rs 52,009 crore for his government’s flagship five guarantee schemes this year.

The Congress government’s five guarantee schemes are — 200 units of free power to all households (Gruha Jyoti), Rs 2,000 monthly assistance to the woman head of every family (Gruha Lakshmi), payment of cash-in-lieu of the additional 5 kg of rice to every member of a BPL household (Anna Bhagya), Rs 3,000 every month for unemployed graduate youth and Rs 1,500 for diploma holders for two years (YuvaNidhi), and free travel for women in public transport buses (Shakti).