Thiruvananthapuram: 'The cess imposed on petrol and diesel is likely to pose an issue for Kerala,' LDF Convenor EP Jayarajan said on Saturday.
"No government can survive without imposing taxes. The budget merely encourages responsible citizens to pay their dues to the government," Jayarajan told Manorama News.
"Fuel prices are lower in places like Mahe and Pondicherry. The difference in petrol, diesel prices compared to bordering regions will give them a competitive advantage over us," he said.
Lower fuel prices in bordering states will make it more conducive for businesses and Kerala a less attractive destination.
"The government will examine how the state can counter the possibility of lower business activity resulting from higher fuel prices," he added.
Jayarajan's comment on fuel price hike in Kerala assumes significance as many leaders of CPM have raised their objections the imposition of additional cess. Some leaders have even asked the finance minister to limit the cess to Re 1, Manorama News reported.
The LDF government had imposed a social security cess on petrol and diesel in the Kerala Budget presented on Friday.
A cess of Rs 2 was imposed on petrol and diesel per litre. This is expected to bring in an additional revenue of Rs 750 crore.
