New Delhi: Petrol and diesel prices have become a big problem for India in the wake of the Middle East Conflict between the USA, Israel and Iran. On Saturday (May 23), the prices of petrol and diesel were hiked once again with oil marketing companies increasing petrol prices by ₹0.87 per liter and diesel prices by ₹0.91 per liter.
Within a span of just 10 days, petrol and diesel prices have been raised three times. During this period, the rates for petrol and diesel have risen by approximately ₹5. Following this hike, the Central Government stated that this increase became necessary due to prevailing circumstances. For 76 days following the outbreak of the conflict, the government itself absorbed the pressure arising from the elevated prices of crude oil. It is worth noting that the Central Government maintains that, even after the recent hike, the rates of petrol and diesel in India have not risen as steeply when compared to other nations.
What did the government say?
The Centre has stated that the reason for the varying prices of petrol and diesel across different states is the Value Added Tax (VAT). This VAT is levied by the respective State Governments, which is why the rates for petrol and diesel differ from one state to another.
The Centre points out that the Excise Duty levied by the Central Government remains uniform across the country. However, the reason for the differing petrol and diesel rates at fuel pumps from state to state is the VAT. The government asserts that some states levy a higher rate of VAT.
The Central Government stated, “Some states levy a VAT of 30 percent or more on fuel. In addition to this, an infrastructure cess is also applicable. There are, however, some states that levy a VAT of around 20 percent per liter on petrol and diesel, and they do not impose any additional surcharges.”
What Are the Prices in Different States?
In certain states, petrol prices have crossed the ₹112 per liter mark. In Andhra Pradesh, Telangana, and Kerala, the price of petrol has exceeded ₹112 per liter. Andhra Pradesh levies a VAT of 31% along with a Road Development Cess of ₹4 per liter; consequently, the effective tax burden in this state has reached approximately 35 percent. In Telangana, the price of petrol is ₹116 per liter. In states where the VAT is lower, the prices of petrol and diesel are also lower. In Gujarat, Uttar Pradesh, Delhi, Haryana, Goa, and Assam, the price of petrol is ₹102 per liter or less.
Did the Government Reduce Excise Duty?
On March 27, 2026, the Central Government reduced the excise duty levied on petrol and diesel by ₹10 per liter each. This reduction was implemented by the government to shield the common man from the pressures of the international market and to provide relief to oil companies.
