CM cites Isaac’s ‘folly’ remark to reject fuel tax cut demand

Thiruvananthapuram: Chief minister V D Satheesan on Tuesday dismissed former finance minister K N Balagopal’s call for a fuel tax cut to offset the recent increase in petrol and diesel prices, citing former finance minister Thomas Isaac’s response to a similar demand in the assembly. He said relief measures would be considered after assessing their overall economic impact.

Replying to an adjournment motion notice moved by the opposition in the assembly, Satheesan said, “The then finance minister, Thomas Isaac, replied that the Left govt would not commit the folly of reducing taxes. Those remarks were made on the floor of this House. My question is whether former finance minister Balagopal is now advising me to do the very same folly.”

The chief minister said the Congress-led opposition had repeatedly demanded tax relief whenever petrol and diesel prices were hiked during the previous govt’s tenure. However, the govt did not forgo even a rupee of the additional revenue generated through fuel price hikes, he said.

“We never asked for the complete withdrawal of taxes. We only demanded that a portion of the additional revenue earned by the state be foregone. We suggested that the govt consider providing relief to those most affected, including autorickshaw and taxi drivers,” he said.

Satheesan pointed out that the former UDF govt led by Oommen Chandy had forgone additional fuel tax revenue four times on petrol and twice on diesel between 2011 and 2016. During that period, the govt had forgone Rs 375.75 crore in petrol tax revenue and Rs 243.42 crore in diesel tax revenue, totaling Rs 619 crore, he said.

He contrasted this with the Left govt’s record, claiming that the state earned an additional Rs 3,100 crore due to fuel price increases between 2016 and Jan 31, 2025, but did not forgo any part of it. Of this, Rs 1,617 crore came from diesel and Rs 1,466 crore from petrol, he said.

Linking the debate to rising inflation and the state’s fiscal challenges, Satheesan said Kerala recorded the highest inflation in the country over the past 11 months and accused the previous govt of failing to intervene effectively in the market. He said the govt owed Rs 2,893 crore to the Kerala State Civil Supplies Corporation, the agency responsible for market intervention and price control.

He alleged that the previous govt left nearly Rs 3,000 crore in dues to the corporation. “If we divert even Rs 10 crore or Rs 500 crore from current revenues, who will repay the debts accumulated by the previous govt? Only after clearing these dues can the civil supplies corporation effectively intervene in the market and tackle the price rise being witnessed now,” he said.

Opposition leader Pinarayi Vijayan recalled that the LDF govt reduced fuel taxes in 2018 and asked whether Satheesan was prepared to honour the stand he took while serving as opposition leader. Balagopal also said the previous LDF govts announced fuel tax concessions in 2018 and 2022. The LDF members staged a walkout after speaker Thiruvanchoor Radhakrishnan disallowed leave for the adjournment motion.