Fuel price spike, crisis in West Asia: Karnataka Travels Owners Association seeks urgent economic relief measures

The association has now called for immediate and coordinated action by state and central governments to mitigate the economic impact. | Photo credit: ALLEN EGENUSE J.

The crisis in West Asia, along with the rise in fuel prices, is putting significant pressure on several sectors in the state, including transport, logistics, agriculture, small and medium enterprises, tourism, hospitality and services, according to the Karnataka Road Owners Association.

The association has now called for immediate and coordinated action by state and central governments to mitigate the economic impact.

K. Radhakrishna Holla, president of the association and director of the Karnataka Federation of Chambers of Commerce and Industry, highlighted the cascading effects of rising fuel prices. He said the state government earns around ₹23,000 to ₹24,000 annually through VAT and sales tax on petrol and diesel, with the current VAT rate on petrol being nearly 29.84%.

“While fuel taxation remains a major source of revenue, continued price increases increase transport costs, production costs and overall market prices, impacting both businesses and consumers,” he said.

Mr. Holla also pointed to discussions in some banks regarding the introduction of the new ECLGS 5.0 scheme aimed at supporting financially disciplined borrowers. He described this as a positive development and called on both public and private sector banks to implement similar relief measures without delay.

He expressed concern over the possibility of further escalation of conflicts in West Asia and warned that any sharp rise in global oil prices could exacerbate economic tensions. “Preventive policy measures are necessary to protect small businesses, the transport sector, agriculture, tourism and industry from a potential downturn,” he added.

Among the key recommendations, the industry body urges the government to carry ESI and PF contributions for at least three months to protect employment, introduce simplified tax relief mechanisms for SMEs and increase working capital and liquidity support through banks.

In addition, it called for temporary exemptions or reliefs in national highway tolls, reductions or waivers of parking and amenities fees in tourist destinations, and temporary reliefs in state fuel taxes.

Mr Holla also stressed the need for continuous monitoring of fuel price trends and supply chain disruptions, along with regular consultations between governments and industry bodies. The president of the association highlighted the infrastructure needs and stressed the importance of developing modern facilities along state and national highways through coordinated efforts.

Published – 28 May 2026 18:23 IST