Fuel taxes in TN are among the

CHENNAI: With fuel prices being hiked, consumers are now looking at whether the state government would cushion them from the steep hike by lowering the state taxes on petrol and diesel.


Tamil Nadu is one the states which charge higher levies on fuel. For instance, the state charges a whopping 30% tax on petrol and 21% on diesel. Andhra Pradesh, which charges 33% on petrol and 22% on diesel, is the only other state ahead of Tamil Nadu.

"If the state decides to cut the tax even by 5%, it would result in a saving of Rs 2.10 on a litre of petrol and Rs 1.62 per litre of diesel for the consumer," oil industry sources said.

"These high rates are untenable. But it is a political decision and we need to wait and see if the government cuts the tax rates, especially with the state assembly elections round the corner," the sources added.

However, some industry experts begged to differ. "You don't drop tax rates to bring down fuel prices. What if the prices flare up in the international markets again? The government will be left with no option. Though lowering rates would align TN with the other states, funding social infrastructure would become difficult as lower taxes mean less inflow into state coffers," a government official said.

In Karnataka, petrol is taxed at 25% while diesel carries state levy of 18% while in Kerala petrol and diesel are taxed at 29% and 25%, respectively.