Kerala not to reduce price on petrol and diesel

The CPI-M-led LDF government in Kerala Thursday ruled out slashing the cess on petrol and diesel to match the Centre's announcement in fuel price cut.

Reacting to Union Finance Minister Arun Jaitley's suggestion asking states to match the Centre's decision with a similar reduction in sales tax or VAT, State Finance minister T M Thomas Isaac said it would adversely affect the state's revenue.

Blaming the Centre for the frequent spurt in price of petroleum products, Isaac said it was the Centre that hiked the taxes on petroleum products.

"Now they have reduced by Rs.1.50 per litre, if the Centre was ready to reduce the full hiked tax completely, the state government would think about it," Isaac said.

Isaac also said the state had already reduced the tax on petroleum products earlier.

The minister said the Centre's move was with an eye on the coming assembly polls in states like Rajasthan and Madhya Pradesh.

During the Karnataka assembly polls also, the Centre had asked oil firms to desist from hiking the price of petroleum products.

Former Kerala chief Minister and CWC member Oommen Chandy asked the state government to reduce the tax on petrol and diesel in the wake of the Centre's decision.

The Centre Thursday announced a Rs 2.50 per litre cut in petrol and diesel prices.

While the Centre cut excise duty on petrol and diesel by Rs 1.50 per litre and asked oil firms to absorb Re 1 a litre of prices, BJP-ruled states including Gujarat, Maharashtra, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Jharkhand, Assam and Tripura announced a cut in VAT of up to Rs 2.5 per litre to effect a Rs 5 per litre reduction in pump rates.

The price cuts would be effective from midnight tonight.