Bhubaneswar: Odisha government has made it clear that it was not in a position to reduce VAT on petroleum products, as it will adversely hit its revenue base.

Finance minister Sashi Bhusan Behera and secretary, finance, T.K. Pandey have indicated that it is not possible to reduce VAT, as Odisha is collecting less tax on petroleum products compared to other states. At present, the state is collecting 26 per cent VAT on petroleum products. The Centre is collecting Rs 19.48 per litre of petrol and Rs 15.33 per litre of diesel. The state gets Rs 15.58 from petrol and Rs 15.33 from diesel.

Behera, however, said: "Let them bring up the issue in the GST council and we will discuss it at that time." Pandey said: "In other states, the price of petrol is more. Even New Delhi and Patna have higher prices than us."

On revenue from petroleum products, he said: "Last year, we had collected Rs 4,800 crore as revenue and in the current financial year, we are expecting it to be Rs 5,600 crore.

Another reason for the state government's refusal to cut down VAT is that its loan burden is expected to reach to Rs 91,943 crore by the end of 2018-19, official sources said.

With the government making public its position, the BJD on Friday launched its three-day agitation in front of petrol pumps across the state to force the Centre reduce the prices of fuel. The Congress also announced its Bharat Bandh programme on September 10 and accused both the BJP and BJD for the rise in the prices of petroleum products in the state.

The BJD also raised the issue in the Assembly and disrupted the proceedings following which the House was adjourned. Later, the party MLAs marched to a petrol pump in the city and staged the demonstration. BJD MLA Sanjay Das Burma said: "Because of the faulty economy policy of the Centre, there is a rise in the prices of petroleum products. We will continue our demonstrations till the prices are not reduced."

However, Union petroleum minister Dharmendra Pradhan slammed the BJD's claim that the state government was getting Rs 7,000 crore from petroleum products.

"The agitation shows their intellectual bankruptcy. There has been a rise in tax collection from petroleum products by 139 per cent in the state. The state government that was collecting Rs 3,000 crore in 2014 is now getting Rs 7,000 crore from petroleum products."

Congress MLA Anshuman Mohanty said: "The party has given a call for Bharat Bandh on Monday. Both the BJP and the BJD are shedding crocodile tears on the issue. The BJP is not putting the issue before the GST council and the state government is not going to reduce the VAT on these products."

State Congress president Niranjan Patnaik tweeted: "Total amount of tax collected from fuel by the Modi sarkar is whopping Rs 11 lakh crore. Is this an elected govt. or a profit making enterprise? How can a govt. be so cruel?"