Chennai: With prices of petrol and diesel touching record highs, the Tamil Nadu government on Monday indicated it would not cut the Value Added Tax (VAT) on these products to help the fuel consumers. A minister argued that the state has tough financial commitments.
“We have to give Rs 77,000 crore worth benefits and sops to many sections. Salary (of government employees) constitutes about 70 per cent (expenditure)... when we give like this, where will the money come from?” fisheries minister D. Jayakumar quipped, when reporters asked him if the state government would cut down on VAT following the huge hike in the fuel prices. The minister pointed out that sale of petroleum products and Tasmac liquor constitutes the main source of the state’s income. And both these items are covered under the VAT regime.
Fuel rates touched a record high yesterday as oil PSUs passed on four weeks of relentless rise in international crude prices to consumers. As of May 21, the cost of petrol in Chennai is Rs 79.47 per litre while that of diesel is Rs 71.59.
Meanwhile, AMMK leader TTV Dhinakaran and MNM founder Kamal Haasan expressed concern over the hike in fuel prices. TTV sought to know why the prices were not hiked till Karnataka assembly elections got over.
“People are facing problems over the Centre’s dangerous decision to allow the oil marketing companies to fix fuel prices on a daily basis. The BJP government should explain the magic behind the rates not going up during the Karnataka elections,” he said in a statement.
Pointing out the taxes on petroleum products were pretty high in India, TTV urged both the Centre and the State to cut taxes on petrol and diesel to help the common man.
MNM president Kamal Haasan wondered why global trends were being blamed for the hike while there were domestic solutions to address the issue. “Experts opine they (Centre) can reduce prices if they want... blaming the world (global trends) is not convincing,” he told reporters here.
On May 18, Economic Affairs Secretary Subhash Chandra Garg had declined to say if the government would cut excise duty on auto fuel to ease the burden on consumers. The government was watching the situation developing from oil prices hitting USD 80 a barrel — the highest since November 2014, and adequate steps will be taken, he had said without elaborating.
But no sooner had Karnataka polled to elect a new government, state-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) on May 14 ended a hiatus in revising petrol and diesel prices that began on April 25 and reverted to the 11-month old practice of changing rates on a daily basis.
