The UP Entry Tax, 2007, levied a 5 per cent per barrel tax on crude, which oil companies now want to recover. In November, state-owned Indian Oil Corporation wrote to the UP government saying it would be “constrained” to increase prices to recover Rs 8,100 crore if it did not get relief from past dues.

IOC said it would raise the price of petrol by Rs 1.51 per litre, diesel by Rs 1.31 per litre, kerosene by 51 paise per litre, and cooking gas by Rs 13.48 per cylinder. These prices do not include state levies; therefore, increases at the retail level would be higher.

The increases will come on top of increases effected on July 25, 2012, which has ensured that auto and cooking fuels are already more expensive in UP than elsewhere. The higher prices since July 25 have covered the ongoing entry tax, but dues from 2007 to July 2012 are yet to be recovered.

IOC has said that the higher prices would be charged for three years. “In case any relief is forthcoming in respect of past dues, revision in selling prices proposed shall be suitably modified,” director (finance) P K Goyal wrote on November 20. The letter sought a waiver of the interest on past dues and withdrawal of the tax, which costs IOC about Rs 1,650 crore annually.