The state government raised sales tax on diesel to achieve price parity with neighbouring states, leading to concerns about inflation and higher transport costs for essential commodities.

BENGALURU: The price of diesel in Karnataka will go up by Rs 2 – with its pump price climbing up from Rs 88.90 to Rs 90.90 a litre – effective Wednesday. However, there’s no change in the rate of petrol.
According to a notification issued by the state’s finance department, the govt raised sales tax on diesel from 18.4% to 21.1%, citing the need for price parity with neighbouring states, a decision that is likely to stoke inflation and negatively impact the cost of transport of essential commodities.
The latest price rise comes on top of a raft of upward revision in tariffs of utilities and household items, including milk, power, transport, which took effect on April 1.
BJP to protest fuel price hike
Govt officials justified the decision, claiming neighbouring states had “requested” Karnataka to increase sales tax on diesel to align prices across borders. They claimed the price disparity was leading to trade diversion in border regions.
Experts have warned the hike will contribute to inflationary pressures. “Diesel is a chief fuel used for goods transportation, and price increase will push up the cost of consumer goods, food and appliances,” said BT Manohar, a member of Karnataka State GST Advisory Council. BJP will hold protests against the hike, beginning at Freedom Park in Bengaluru Wednesday.

KEY HIGHLIGHTS