In a big relief for people in Tamil Nadu, the state government today said it would reduce petrol price by Rs 3 per litre. Tamil Nadu Finance Minister Palanivel Thiagarajan, while presenting the state budget today, said petrol price has been cut by Rs 3 and because of this, the state will incur a cost of Rs 1,160 crore a year.
"2.6 core people in Tamil Nadu use two-wheelers. We have reduced Rs 3 in petrol price, and due to this we will face a Rs 1,160 crore deficit," Mr Thiagarajan said, according to news agency ANI.
This was the first budget presented by the Dravida Munnetra Kazhagam (DMK) government of Chief Minister MK Stalin after the party swept the assembly election in April this year.
Fuel prices have been rising across the country and have breached the Rs 100 mark in several states.
Fuel prices differ from state to state depending on the incidence of local taxes such as value-added tax (VAT) and freight charges.
As much as 55 per cent of the retail selling price of petrol in Delhi, for example, is made up of taxes - Rs 32.90 a litre excise duty collected by the central government and Rs 22.80 VAT levied by the state government. Half of the diesel price is made up of taxes - Rs 31.80 central excise and Rs 13.04 state VAT.
Opposition parties including the Congress have been criticising runaway fuel prices. Congress leader Priyanka Gandhi Vadra in June said the government was making taxes on petrol and diesel a means to "loot" people.
"Despite crude oil prices reaching $19 per barrel in the international market in April 2020, the central government did not allow its benefits to reach the people of the country but continued to fill their pockets and those of companies," Ms Gandhi said.