The Haryana government has decided to hike Value Added Tax (VAT) on petrol from 20 % to 25 % which will make petrol costlier by R2.20 per litre, according a government spokesman.
Petrol is R57.16 per litre in the state. However, after the proposed hike, it will be R59.36 a litre.
The increase is still lower than the average retail price of R74.12 per litre in the state in July 2014, the spokesman said.
Sources said the decision to hike VAT has been taken to generate additional revenue of R245 crore. The revenue had sunk following repeat drops in petrol prices after July 2014. The state government had hiked VAT on diesel about three months ago.
The new VAT rate on petrol with 5% surcharge will now be 26.25%. Earlier, it was 20% plus surcharge. VAT on petrol is 30.80 % in Punjab, 26.80 % in Uttar Pradesh, 30 % in Rajasthan and 27 % in Himachal Pradesh, an official spokesman of excise and taxation department said.
Meanwhile, the Indian National Lok Dal state president Ashok Arora has demanded an immediate rollback of the hike. He said the hike would put an additional burden on the people.
Former chief minister Bhupinder Singh Hooda termed the decision as anti-people and said that it reeked of the BJP's frustration after debacle in Delhi polls.
Haryana Janhit Congress leader Kuldeep Bishnoi also flayed the decision and demanded its roll-back.