Kerala’s Chief Minister-designate V.D. Satheesan on Friday (May 15, 2026) stated that his government would attempt to cushion the cost of living crisis, including higher commuting and freight costs, driven by the latest hike in fuel prices precipitated by the war in West Asia.

The situation in West Asia and the United States’ continued naval blockade of the Strait of Hormuz has throttled the supply of crude, sending fuel and cooking gas prices spiralling upward globally. 

Notably, Mr. Satheesan, as former Leader of the Opposition (LoP) in Kerala, had opposed the previous Left Democratic Front (LDF) government’s contentious decision to levy a social security cess of ₹2 per litre on petrol and diesel to subsidise the State’s expansive social security pension net. It covers over 62 lakh persons in the State, including widows, senior citizens, disabled persons, single women and farm workers. 

Kerala politics LIVE updates - May 15, 2026

Mr. Satheesan had pointedly insisted in the Assembly that the levy had spiked inflation, upended family budgets, and paved the way for fuel smuggling from neighbouring Tamil Nadu and Karnataka, where per-litre diesel and petrol rates are considerably lower compared to Kerala. 

The United Democratic Front (UDF), then in the Opposition in the State, had also argued that the fuel cess had reduced the State tax on fuel sales. The party had alleged that fuel sales in Kerala during the 2024-25 period, which were supposedly around ₹4000 crore, had dwindled by nearly ₹1000 crore, costing the public exchequer dearly. 

The UDF had also attributed the loss in fuel tax revenue to interstate freight and transport operators tanking up in Tamil Nadu and Karnataka to avoid the extra ₹2 cess levied in Kerala. Moreover, it had also claimed that Kerala sustained considerable revenue losses owing to fuel smuggling through its well-networked, porous borders with neighbouring States. 

UDF govt. likely to consider austerity measures in Kerala

Provincial governments in New Delhi, Tripura, Uttar Pradesh and Sikkim have ordered a partial work-from-home policy for government offices and the private sector as part of an urgent austerity drive to conserve fuel and, at least partly, insulate workers from rising commuting costs. 

A UDF insider said the new government, which will take the oath of office on Monday (May 18, 2026), might consider similar options for Kerala, given that other States, including neighbouring Karnataka and Tamil Nadu, are reportedly poised to follow suit.