Petrol, diesel price hike: Why fuel prices differ in BJP and Congress-ruled states, why rates are highest in Andhra Pradesh | Today’s news
As petrol and diesel prices were hiked for the third time on Saturday, May 23 – with a cumulative increase in the prices of these essential fuels ₹5 per liter – the BJP-led central government has claimed that fuel prices are higher in opposition-ruled states, Moneycontrol reported.
Petrol and diesel prices vary from state to state due to different rates of Value Added Tax (VAT) and other local charges levied by different state governments.
While the central excise duty charged by the Union government remains standard across the country, the final retail price paid at the pump largely depends on the state-level taxation policy.
Read also | Petrol and diesel prices rose for the third time in 10 days. Check the latest rates
“States with the highest VAT impose effective rates of 30% and above, layered with surcharges per liter and infrastructure surcharges. States with the lowest rates close to 20%, no top-up per liter and no other concessions. The geographic map of the deviation is, with a few exceptions, the political map of the deviation,” Moneycontrol said, citing the Centre’s announcement.
State Gasoline Price Fluctuations
After the last price revision, the retail price of petrol was the highest in Andhra Pradesh at ₹117.8 per liter. Andhra Chief Minister Chandrababu Naidu’s Telugu Desam Party (TDP) is an ally of the BJP at the Centre. Andhra Pradesh collects 31% VAT along with surcharge ₹4 per liter and cess for road construction, pushing the effective tax burden to nearly 35%.
After Andhra, Telangana and Kerala reported the highest petrol prices ₹115.7 a ₹112.3 or Both the states have Congress government.
Meanwhile, Madhya Pradesh, West Bengal, Bihar, Rajasthan and Madhya Pradesh have announced petrol prices ranging from ₹111.4 a ₹108 per liter. All these states have BJP led governments.
Conversely, four BJP-ruled states – Haryana, Delhi, Uttar Pradesh and Gujarat – have the lowest petrol prices in the range of ₹99.7 a ₹99.1 per litre.
At the same time, in Punjab, where the Aam Aadmi Party rules, the retail price of petrol ₹101.1 per liter.
Gasoline is expensive despite the reduction in consumption tax
The central government, led by Prime Minister Modi, has hit out at systemic excise duty cuts to protect the domestic economy from supply-side shocks resulting from the US-Iran war and subsequent strangulation of the Strait of Hormuz.
However, because state-level VAT is calculated as an ad valorem percentage of basic operating costs, the final retail price paid by ordinary citizens remains heavily dictated by local governments.
On March 27, the Center reduced excise duty on both petrol and diesel ₹10 per litre, reducing the tax on petrol to just ₹3 per liter and reduction of domestic excise duty on diesel to zero.
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“When the central consumption tax is reduced on March 27, 2026, o ₹10/litre on petrol and diesel, BJP-ruled states have gone through a full cut right down to the pump. Congress-ruled and INDIA bloc states have not separately reduced VAT, which means a consumer in those states still pays more than a consumer in a BJP-ruled state directly because of state taxation,” Moneycontrol said, citing the Centre’s announcement.
Meanwhile, BJP-ruled states are considering reducing the VAT levied on petrol and diesel, sources told Mint earlier.
Read also | After cut in excise duty, states under BJP government may reduce VAT on diesel
