Karnataka: Diesel price to increase as state government hikes sales tax

According to the Akhila Karnataka Petroleum Dealers Association, diesel prices per litre may increase by Rs 2-2.75.

Diesel prices in Karnataka will increase after the state government hiked the sales tax on diesel by 3 percent on April 1, with immediate effect.

As per the state government notification on Tuesday, Karnataka Sales Tax (KST) on diesel has been increased from 18.4 percent to 21.17 percent.

In Karnataka, diesel is priced at Rs 88.99 per litre, while petrol costs Rs 102.92 per litre. According to the Akhila Karnataka Petroleum Dealers Association, diesel prices per litre may increase by around Rs 2.

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Additional Chief Secretary to the Chief Minister of Karnataka LK Atheeq told Moneycontrol that diesel prices in Karnataka are still the cheapest in South India, even after the sales tax hike. "The increase in sales tax on diesel is expected to generate about Rs 2,000 crore. There are no plans to increase the sales tax on petrol."

The tax rate will rise to 21.17 percent from April 1, increasing the price by Rs 2 to Rs 91.02. A state government note stated that as of March 31, diesel prices per litre are Rs 89.02 in Bengaluru (Karnataka), Rs 94.42 in Hosur (Tamil Nadu), Rs 95.66 in Kasaragod (Kerala), Rs 97.35 in Anantapur (Andhra Pradesh), Rs 95.70 in Hyderabad (Telangana), and Rs 91.07 in Kagal (Maharashtra).

The hike in diesel prices will push up transportation charges, which are likely to be passed on to customers—leading to an increase in the prices of essential commodities, including vegetables and fruits, further burdening consumers already affected by rising costs.

It may be recalled that the Karnataka state government, in June 2024, had increased Sales Tax (KST) on petrol from 25.92 percent to 29.84 percent and on diesel from 14.3 percent to 18.4 percent, which led to an increase in the prices of petrol and diesel per litre by Rs 3 and Rs 3.02, respectively.

The Congress-led government is facing criticism over a series of price hikes. Bengaluru's civic body, the Bruhat Bengaluru Mahanagara Palike (BBMP), has decided to collect a user fee for solid waste management alongside property tax from households starting April 1. Other recent hikes include a 15 percent increase in bus fares, a Metro fare hike of up to 71 percent, a Rs 4 per litre rise in milk prices, and higher power tariffs. Fixed charges are set to rise by Rs 25 in 2025-26, Rs 30 in 2026-27, and Rs 40 in 2027-28.

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