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>Key Highlights State government of Kerala has decided to cut petrol and diesel prices by Re 1 per litre The relief for consumers will come into effect from June 1 THIRUVANANTHAPURAM: Kerala government on Wednesday decided to reduce the fuel price in the state by Rs 1 per litre, with effect from June 1 onwards. The state cabinet has decided to forgo Rs 1 each from the state tax on petrol and diesel. Chief Minister Pinarayi Vijayan , after the weekly cabinet meeting, told reporters that the government decision should be treated as a token initiative which should prompt the central government to take immediate steps to cut down the price of petrol and diesel. "The state exchequer would lose Rs 509 crore per annum by reducing the tax share by Rs 1 per litre. Any further hike on petroleum products in the state would be eligible for this one rupee cut per litre. Our decision to forgo a portion of the tax revenue, even during the period of financial precariousness should work as an eye opener for the union government, which, so far, has not taken any steps to control the fuel price in the country’’, Pinarayi Vijayan said. The price per litre of petrol in the state of Kerala is over Rs 85 and Rs 75, respectively for petrol and diesel as on May 30. The union government should learn the message sent out by the kerala government and take appropriate steps to cut down the fuel price considerably’’, Pinarayi Vijayan said. At present, the state levies 32.2 per cent tax on petrol and 25.58 per cent tax on diesel. In other words, the state pockets Rs 19.50 as tax from per litre of petrol and Rs 15.51 from single litre diesel. Meanwhile, opposition leader Ramesh Chennithala termed the government's decision as an eye wash. Instead of cutting down the price by Rs 1, the government should have decided to forgo the additional revenue from the price increase. "The UDF government in the past had done it for times'', he said. Earlier in the day, an error in the official website of Indian Oil Corporation (IOCL), the country's largest fuel retailer, resulted in an embarrassment of sorts. Petrol and diesel prices were cut by 1 paisa per litre in the national capital of Delhi after the prices went up for 16 straight days. Read here: Indian Oil faux pas: Petrol, diesel prices cut by 1 paisa, not 60 paise However, IOC's website in the morning notified that petrol and diesel prices have been cut by 60 paise and 56 paise respectively. Later, the error was fixed.<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>
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.