State trims taxes on diesel fuel

The Uttar Pradesh state government is likely to bring down the state tax on diesel fuel from the current 22%, including state development tax of 1%, to 12%, to align it with the nearby states like Delhi, Haryana, Uttaranchal and Punjab. The state stands to lose an estimated Rs70 crores (US$15.22 million) as a result of the tax realignment. Alternative measures are being discussed to make up for the loss of tax revenue. Uttar Pradesh Petrol Pump Dealers Association President P N Shukla said that diesel fuel sale in the state has suffered, declining by as much as 50%, because the price of diesel fuel in the adjoining states are about Rs3 (US$0.07) per liter less than Uttar Pradesh due to higher state taxes. (September 10, 2006)