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May 24, 2012, 07.00 PM IST | Source: IBNLive.com

Kerala, Uttarakhand cut tax on petrol after Congress diktat

After public anger over the sharp 10% petrol price hike, the government is trying to soften the blow. Under pressure from its allies, the Opposition and the public over the steep hike in petrol price, the Congress has asked all its chief ministers to cut state taxes on petrol.

After public anger over the sharp 10% petrol price hike, the government is trying to soften the blow. Under pressure from its allies, the Opposition and the public over the steep hike in petrol price, the Congress has asked all its chief ministers to cut state taxes on petrol. For every one rupee paid for petrol almost 40 paisa is state taxes.

Uttarakhand and Kerala have already gone ahead and announced the cut. Petrol will now be Rs 1.63 cheaper in Kerala and Rs 1.87 cheaper in Uttarakhand.

Kerala Chief Minister Oomen Chandy has written to the Prime Minister asking for a rollback on the petrol prices.

A decision to this effect was taken at the state cabinet presided over by Chief Minister Vijay Bahuguna on Wednesday night, sources said. Following the cabinet decision, the consumers of the hill state would get a relief of Rs 1.87 per litre on the prices of petrol, they said.

After the hike in the prices last night, petrol is currently being sold in Uttarakhand at the rate of Rs 75.24 per litre.

If the Congress-ruled states follow the diktat, the states that are likely to benefit are Delhi, Haryana, Kerala (coalition), Manipur, Rajasthan, Uttarakhand, Maharashtra (coalition), Arunachal Pradesh, Mizoram, Jammu and Kashmir (coalition), Andhra Pradesh, Meghalaya, Assam, West Bengal (coalition).

The Opposition is fuming, demanding a rollback. The NDA has called for a nationwide bandh on May 31. The Congress termed the NDA's move 'misleading'. Congress leader Rashid Alvi said, "It is a very difficult decision taken by oil companies. The companies are compelled to take such decisions due to a rise in the dollar. The NDA should not misguide the country by going on a strike, they know the situation of the country."

Left parties on Thursday staged protests here against yesterday's hike in petrol price. CPI state secretary D Pandian led a protest at Saidapet while the CPI (M)-affiliated youth organisation DYFI staged a protest outside Indian Oil Bhavan.

Apart from West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee, most of the UPA allies have sided with the government on this one.

"We have made a commitment to support this government, that is the reason we are not moving out. But our support does not mean that we cannot protest. We believe that the government is being unjust, it's one sided and not correct," Mamata said.

The dawn-to dusk hartal called separately by LDF and BJP in Kerala to protest the increase in petrol price partially affected normal life across the state on Thursday.

Tamil Nadu Chief Minister J Jayalalithaa also demanded an immediate rollback of the hike.

In Delhi, petrol pump owners sought additional security fearing violence. Many pumps also put a cap on sales. Public anger over the decision was evident, with protests in many cities.

While the Congress grapples under pressure over the petrol price hike, a hike in diesel prices is also on the cards. Sources say the Empowered Group of Ministers (EGoM) will meet on Friday to discuss a possible hike in diesel and LPG prices too.

Sources also say that oil companies are pushing for a Rs 5 hike in diesel prices.

The increase was on the cards with the rupee continuing its free fall against the US dollar. The rupee fell to a record life low of 56 per dollar on Wednesday.

In Delhi, petrol now costs Rs 73.14 while Hyderabad pays one of the highest rates at Rs 81.44.

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