Thiruvananthapuram: Fuel sales in Kerala have declined after the prices of petrol and diesel were hiked by Rs 2 per litre each with an aim to boost revenue for the state. With the fall in sales, the government is incurring a huge loss in terms of taxes.

The plunge in sales may be due to the reduction in fuel consumption by private vehicles alongside the gradual shift to electric vehicles, and the increasing trend of goods vehicles opting for cheaper diesel from neighbouring states. 

With the introduction of the cess, the inter-state goods vehicles started refuelling from other states. Even the buses of the Kerala State Road Transport Corporation are opting for fuel from other states.

As the number of vehicles in the state increases every month, the sale of fuel normally increases every month. Fuel consumption had come down significantly only during the long coronavirus pandemic period. 

The Kerala government had imposed a social security cess of Rs 2 each on petrol and diesel from April 1. The price of petrol had then gone up to Rs 109.42 per litre (in Thiruvananthapuram) and diesel to Rs 98.24 per litre. While 21.21 crore litres of petrol were sold in March this year, the sales fell to 19.73 crore litres in April — a drop of 1.48 crore litres. Meanwhile, the quantity of diesel sold was 26.66 crore litres in March and 20.28 crore litres in April — a fall of 6.38 crore litres. Compare these to sales figure a year ago: in April 2022, 19.98 crore litres of petrol and 23.78 crore litres of diesel were sold in the state. 

The state government levies a tax of Rs 25 on a litre of petrol and Rs 18 on a litre of diesel. The difference in tax revenue for March-April 2023 is around Rs 150 crore due to reduced sales, diesel and petrol put together.