The Karnataka Government on Monday, decided to reduce the tax on petrol and diesel prices by Rs 2 and become the fourth sate to reduce the VAT on the fuel. The state governments have taken this step to bring relief to people of the state as fuel continues its northward march, almost crossing the Rs 90 mark in Mumbai.
West Bengal, Rajasthan and Andhra Pradesh had reduced the VAT on the petrol and diesel after the central government refused to reduce excise duty on fuel. Rajasthan Chief Minister Vasundhara Raje announced a four per cent reduction in VAT on petrol and diesel a day before the Congress-led ‘Bharat Bandh’ which led to the reduction of petrol prices by 2.5 per liter and the Andhra Pradesh assembly passed a resolution to reduce petrol and diesel prices by Rs 2 per litre on September 10.
The main reason for the continuous increase in domestic retail prices of petrol and diesel is the rise in the global prices of crude and the fall in the rupee against the dollar.
The union government did announce a few measures to restrict the devaluation of the rupee but the domestic currency continued its downward slide on Monday. It was trading at 72.81 against the dollar in morning trade.