The Karnataka government has announced a significant increase in the Karnataka Sales Tax (KST) on diesel, elevating the rate from 18.4% to 21.17%. This change, effective from April 1, 2025, will lead to a ₹2 per litre rise in diesel prices, bringing the retail cost to ₹91.02 per litre statewide. In Bengaluru, residents will also see petrol priced at ₹102.92 per litre, while the new diesel price takes effect starting Tuesday.
Impact of the Diesel Price Hike
The recent adjustment marks a notable shift in the state’s fuel pricing landscape. Currently, diesel is available at ₹88.99 per litre, but the impending increase is set to affect many households. The last notable change in diesel prices occurred in June 2024, when the government raised the sales tax on petrol from 25.92% to 29.84% and on diesel from 14.3% to 18.4%, resulting in price hikes of ₹3 for petrol and ₹3.02 for diesel.
Rising Costs and Public Sentiment
The Siddaramaiah-led administration is under fire for a series of price increases impacting various sectors. Among these, the introduction of a user fee for solid waste management by the Bruhat Bengaluru Mahanagara Palike (BBMP) has raised concerns. This fee will be collected along with property taxes starting this month, adding to the financial strain on residents.
- Public transport fares have surged:
- Bus fares increased by 15%
- Metro fares rose by up to 71%
- Essential goods are also affected, with milk prices seeing a ₹4 per litre increase.
Future Energy Costs
The energy sector will not be spared, as power tariffs are projected to rise significantly over the coming years. According to a report from Moneycontrol, fixed charges will increase by ₹25 in 2025-26, followed by ₹30 in 2026-27, and an additional ₹40 in 2027-28.
Government’s Justification for the Tax Increase
Additional Chief Secretary LK Atheeq defended the tax increase, asserting that even after this hike, diesel prices in Karnataka remain competitive within South India. To support this claim, the government provided a comparison of diesel prices across neighboring states:
- Bengaluru (Karnataka): ₹89.02
- Hosur (Tamil Nadu): ₹94.42
- Kasaragod (Kerala): ₹95.66
- Ananthapura (Andhra Pradesh): ₹97.35
- Hyderabad (Telangana): ₹95.70
- Kagal (Maharashtra): ₹91.07
Atheeq noted, “The KST on diesel was as high as 24% before November 2021, when the price per litre was ₹92.03.” This context aims to highlight that despite the increase, prices remain lower than historical highs.
In summary, as Karnataka grapples with rising costs across essential services and commodities, the government’s latest tax hike on diesel adds to the growing financial burden on its citizens, prompting widespread discourse on budget management and public welfare.
