States see red as FinMin passes buck on fuel rates

Insult to States already hit by pandemic costs, falling revenues, say ministers

A day after Union Finance Minister Nirmala Sitharaman ruled out any imminent cut in fuel taxes levied by the Centre and said States should cut their own taxes on fuel to give relief to consumers, several State governments were not amused and termed it an insult when their finances were already weak. Ms Sitharaman had asserted that States gain more than the Centre due to higher oil prices because they charge ad valorem duties while the Centre charges a fixed levy, which will be difficult to slash as it had to subsidise fuel price reductions undertaken by the UPA in 2012-13. “The Union Finance Minister has made it amply clear that the Centre has no intention to reduce the fuel prices. The stand that the States have the option to reduce it is tantamount to insulting the States which are already in a financially weak condition,” said Kerala Finance Minister K.N. Balagopal.