The Karnataka State Government has announced a sales tax increase on diesel, resulting in a price rise of Rs 2 per litre. Effective April 1, 2025, the sales tax rate on diesel will be adjusted from 18.44 percent to 21.17 percent, bringing the new price to Rs 91.02 per litre in the state.
This recent hike adds to a trend of escalating costs, including increases in property tax, electricity tariffs, and milk prices, which are further straining the financial situation for residents in Karnataka.
Previously, before November 4, 2021, Karnataka had a sales tax of 24 percent on diesel, pushing prices to Rs 92.03 per litre. However, in June 2024, the government reduced the rate to 18.44 percent, leading to a drop in the fuel price to Rs 89.02 per litre in Bengaluru.
Despite the latest increase, Karnataka’s diesel prices still remain lower than those in neighboring states. As of March 31, 2025, diesel prices were noted at Rs 94.42 per litre in Hosur, Tamil Nadu; Rs 95.66 in Kasaragod, Kerala; Rs 97.35 in Anantapur, Andhra Pradesh; Rs 95.70 in Hyderabad, Telangana; and Rs 91.07 in Kagal, Maharashtra.
The Karnataka government has justified the tax revision, asserting that even after the increase, diesel prices in the state remain competitive. Officials indicated that the additional revenue generated will be directed towards infrastructure development and public welfare initiatives.
