Nirmala Sitharaman’s proposal to hike the duty on petrol and diesel has kicked off a war of words between the Centre and Karnataka, after motor fuels have become dearer in the state by at least Rs 2.50.
She sought to hike the special additional excise duty and road infrastructure cess by Rs 1/litre of petrol and diesel. While this would increase the landing cost of fuels in Karnataka Rs 2/litre, the effective price in the state would further increase because of ad valorem sales tax imposed by the state government, the quantum of which increases with base prices.
As a result, petrol, sold at Rs72.83 a litre in Bengaluru on Friday, will now cost Rs75.48 and the price of diesel will go up from Rs66.45 a litre to Rs69.01.
