Kerala gives up levy on diesel

Thiruvananthapuram, June 27 (ANI): Kerala Chief Minister Oommen Chandy on Monday said that the state government has decided to forgo the state tax share in the recent increase on diesel price.handy said this in the state assembly while replying to an adjournment notice given by opposition LDF on the issue.

Diesel price would come down by 75 paise due to the decision. The state exchequer would lose Rs 142.2 crore by giving up the tax, he said.

Kerala had given up the tax when petrol price was hiked by the Centre last month.

The Centre on Friday hiked the price of diesel by three rupees a litre, kerosene by two rupees a litre and LPG by 50 rupees a cylinder.

Since it was first elected in 2004, Prime Minister Dr. Manmohan Singh government has more often than not refrained from pushing through tough reforms in favour of pleasing its predominantly rural voter base.

Diesel is the most widely used transport fuel in India and powers tractors and irrigation pumps for farmers in one of the world's biggest producers and consumers of grains and sugar.

Since the government agreed in principle to lift fuel costs a year ago, international crude prices have soared 39 percent, swelling the money spent on subsidising fuel prices to a country with 500 million people living in poverty.

Petrol prices, which largely affect more affluent Indians, have gone up about 23 percent since they were freed a year ago.

According to official estimates, the public sector oil companies are currently losing 490 crore rupees per day on sale of petrol and diesel, kerosene and LPG cylinder at current prices. (ANI)