Amidst soaring fuel prices, Kerala government has decided to effect a reduction of Re 1 in petrol and diesel prices. At a press conference today afternoon, Chief Minister Pinarayi Vijayan said prices on petrol and diesel will be reduced by Re 1 in the state. This will bring down the annual tax revenue of the state by Rs 509 crore, Vijayan added. This move will be a huge relief to the people in Kerala who have been struggling with the sky-rocketing fuel prices. The state government decision comes in the wake of fuel prices going up steadily in the last two weeks after Karnataka election. Today morning, though the oil companies announced a decrease in the petrol price by 0.60 paise, at 11 am it was revised to just 0.01 paise. Petrol is priced at Rs 82.57 per litre and Diesel at Rs 75.14 per litre. In the cabinet meeting, Kerala Finance Minister, TM Thomas Issac proposed the idea to slash state taxes rate, which got approved by the chief minister. Interestingly, Kerala is the first state to take up such initiative in order to bring down the fuel prices. Earlier in 2015, Oommen Chandy lead UDF government had also taken similar steps to deal with the fuel price hike. Though the actual figure of tax rate cut is yet to be announced, it is expected that the state may cap their revenue at the pre Karnataka election rates. Currently Kerala is the 3rd most highly fuel priced state after Maharashtra and Punjab. Kerala charges 32.02 per cent on petrol and 25.5 per cent on diesel. The LDF government hopes that this populous announcement will give them a facelift. Also read: UP potato farmers face sharp drop in sale due to fuel price hike Also read: Take it: After 16-day surge, petrol, diesel prices cut by 1 paisa<doc-sep>Hours after oil-marketing companies cut the price of petrol and diesel by 1 paisa owing to a fall in global crude oil rates, the state government of Kerala reduced the tax levies on fuel by Re 1. The move, effective from June 1, comes amid growing clamour for an excise duty cut to bring down skyrocketing fuel prices. The decision, which was taken at a meeting of the state cabinet in Thiruvananthapuram, marks the first instance of a cut in fuel taxes after prices touched all-time highs across the country following 16 consecutive hikes post Karnataka elections. "Our state is not doing financially well. But our government has taken the decision to cut sales tax on fuel to effect a Re 1 reduction in petrol and diesel prices from June 1. This will cause a revenue loss of Rs 509 crore annually. This should be seen as our message to the Centre. Fuel prices cannot go up like this. They must slash prices so as to provide relief for the common man," Chief Minister Pinarayai Vijayan said at a press conference following the cabinet meet. According to IndianOil, in state's capital Thiruvananthapuram, the petrol was retailing at Rs 82.61 per litre whereas diesel was available for Rs 75.19 per litre. Kerala currently levies 24.52 per cent tax on diesel and 31.8 per cent on petrol. The state also levies Re 1 as a cess on both petrol and diesel. Fuel revenue is the third-largest revenue grosser for the state. According to SBI's Ecowrap report, states can cut petrol price by Rs 2.65 per litre and diesel by Rs 2 a litre if they decide to forego potential additional gains out of high crude oil rates. It also suggested that to further rationalise fuel prices states can consider a pricing mechanism where VAT is imposed on base price only by states and not on prices inclusive of the Centre's tax. The price of petrol has shot up by Rs 3.79 per litre and that of diesel by Rs 3.37 per litre in the past 16 days. Fuel prices in India are among the highest in South Asia. Currently, petrol is taxed at a little over 100 per cent and for diesel the taxes come at around 66.48 per cent. These taxes include central excise duty and VAT. Excise duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre ever since Prime Minister Narendra Modi-led BJP government came to power in 2014. After moving to daily revision of fuel prices in June last year, the government had cut basic excise duty on petrol and diesel by Rs 2 per litre in October last year.<doc-sep>The Kerala government on Wednesday announced a Rs 1 per reduction per litre in the price of petrol and diesel from Friday Thiruvananthapuram: The Kerala government on Wednesday announced a Rs 1 reduction, per litre, in the price of petrol and diesel from Friday i.e. 1 June, in a bid to provide some relief to people hit by rising fuel costs. Addressing reporters in Thiruvananthapuram after the weekly cabinet meeting, Chief Minister Pinarayi Vijayan said: "The state government has decided to forego Re 1 from its tax portion and as a result, the loss to the exchequer would be Rs 509 crore in a year." "We wish to send a message to the Centre that despite pleas from several quarters, it is not doing anything to bring some relief to the people. "The price of fuel products is rising when international prices are falling. We did this because we wish to show our intent," Vijayan added. On Wednesday, in Delhi, Kolkata, Mumbai and Chennai, petrol retailed at Rs 78.42, Rs 81.05, Rs 86.23 and Rs 81.42 per litre respectively, with prices down one paisa from Tuesday, according to revised data available on the Indian Oil (IOC) website. In tandem with the trend in petrol rates, diesel sold at Rs 69.50, Rs 71.85, Rs 73.78 and Rs 73.17 per litre in Delhi, Kolkata, Mumbai and Chennai respectively on Wednesday, all down one paisa. A further fall in domestic fuel prices is expected as global crude oil prices eased recently. Prices of petrol in Delhi, Mumbai and Chennai reached record levels over the past two weeks and were seen scaling new highs everyday. In Kolkata, the fuel sold at near four-year high levels.<doc-sep>The Kerala government on Wednesday announced to reduce fuel prices by Re 1 in the state with effect from Friday. This comes at a time when the Centre reduced prices by a meager 1 paisa, thus inviting much flak from the opposition. Kerala CM Pinarayi Vijayan on Wednesday said, “Kerala government has decided to reduce the prices of petrol and diesel by Re 1 in the state and it will come into effect on 1 June.” Petrol price in the state on Wednesday was Rs 82 per litre, while for diesel it was Rs 75, Vijayan said. A decision in this regard was taken at the state cabinet on Wednesday. The reduction would cause a yearly loss of Rs 509 crore to the state exchequer on the tax front, he said. State governments apply an additional VAT on fuel prices over and above the excise duty charged by the central government. The move by the Kerala government comes as the first among states reeling under surging fuel prices for the past several weeks. Bound to have political ramifications, the price cut may also force other states to toe the line. "The Centre should reduce the rising fuel prices as it was causing severe hardship to the common man", Vijayan said, adding that by reducing the petrol and diesel prices in Kerala, the government has set an example for the Centre to follow. Petrol and diesel prices are at an all-time high, rising every day for the last 16 days. In all, petrol price has increased by Rs 3.8 per litre and diesel by Rs 3.38. The reduction in petrol and diesel prices by 60 paise on Wednesday turned out to be a "clerical error" and it was revealed that fuel prices were down by a mere 1 paisa. The oil companies on Wednesday morning announced a reduction in petrol price by 60 paise to Rs 77.83 a litre and diesel by 56 paise to Rs 68.75 in Delhi. This was rectified to 1 paisa a litre.<doc-sep>
Kerala Chief Minister Pinarayi Vijayan. Express Photo by Tashi Tobgyal Kerala Chief Minister Pinarayi Vijayan. Express Photo by Tashi Tobgyal The LDF government in Kerala has decided to cut petrol and diesel prices by Re 1, with effect from Friday, June 1, Chief Minister Pinarayai Vijayan announced Wednesday. “Our state is not doing financially well. But our government has taken the decision to cut sales tax on fuel to effect a Re 1 reduction in petrol and diesel prices from June 1. This will cause a revenue loss of Rs 509 crore annually. This should be seen as our message to the Centre. Fuel prices cannot go up like this. They must slash prices so as to provide relief for the common man,” Vijayan told reporters during a routine press briefing after the weekly cabinet meeting. There were indications, over the past few days, that the state government will make an announcement to send a message to the BJP-led Centre. Earlier today, Oil Marketing Companies (OMCs) reduced fuel prices by 1 paisa hours after erroneously announcing a cut of 60 paise. Price of petrol in state capital Thiruvananthapuram today was Rs 82.61 while diesel was retailing at Rs 75.19. Today’s marginal reduction comes after 16 consecutive price increases since May 14 when fuel retailers ended a 19-day pre-Karnataka poll hiatus to pass on a spike in global oil rates. In all, petrol price was increased by Rs 3.8 per litre and diesel by Rs 3.38 in that fortnight. Prices vary from state to state depending on local sales tax or VAT. Economic Affairs Secretary Subhash Chandra Garg had on Monday stated that fuel prices are expected to cool in the next two or three days. Last week, the government announced that it was working on a long-term solution to address the volatility in fuel prices. The BJP-led government, in June last year, junked a 15-year old practice of revising rates every fortnight and moved to daily revisions. Accordingly, domestic prices now track global oil prices each day. But these price revisions were put on hold for nearly three-weeks, prior to the May 12 Karnataka assembly election.