Keralam Government Examines Fuel Tax Reduction to Boost Consumption and Revenue

Keralam Chief Minister V D Satheesan has stated that the state government is examining the possibility of reducing fuel taxes if the move helps revive consumption and increase revenue. Speaking on Saturday at the Ignite Kerala Convention, organised by the All Kerala Federation of Petroleum Traders (AKFPT), the Chief Minister noted that an earlier increase in fuel cess had led to a decline in fuel consumption and a consequent loss of revenue for the government.

Satheesan recalled that he had previously cautioned against raising the fuel cess. He stated that the government was examining the current tax proposal in detail and emphasized that entrepreneurs and industrialists are not enemies of the state. He reiterated the government's commitment to protecting taxpayers and extending support to industry and entrepreneurship.

During the event, the Chief Minister also highlighted the issue of large-scale diesel smuggling into Keralam, assuring that stringent measures would be taken to curb the illegal trade. Additionally, he assured petroleum dealers that their concerns regarding dealer commissions would be escalated to the Union Ministries of Petroleum and Finance for appropriate resolution.

Earlier, AKFPT president Tomy Thomas urged the State government to recommend a revision of dealer commissions to the Centre and oil marketing companies in line with prevailing economic conditions. Thomas also called for the introduction of a special Petrol Pump Protection Act to ensure the safety of petrol pump establishments and their employees, and urged the withdrawal of additional cesses affecting consumers and dealers. The organisation's charter of demands was formally submitted to the Chief Minister by AKFPT president Tomy Thomas and general secretary Y Ashraf.

Other prominent figures present at the convention included M P Ashokan, K S Komu, Mythanam Vijayan, Moosa B Cherkala, Sunil Abraham, M S Prasad, Hibi Eden M P, Uma Thomas MLA, Radhakrishna Menon, and Mayor V K Minimol.

"Tax structures directly impact consumer demand, business operations, and overall economic activity. When consumption drops due to increased cesses, it creates a cascading effect on retail trade and local commerce. Evaluating tax adjustments alongside industry consultations is a practical step toward restoring market balance. Addressing operational challenges, such as dealer margins and regulatory protection, will further strengthen the retail petroleum sector and support local businesses." — Dr. Shishir Gupta, Founder & CEO, StartupLanes