How much tax is included in the fuel price?
A significant portion of the retail price of petrol and diesel in India consists of taxes imposed by both the central government and state governments. These taxes play a major role in determining the final amount consumers pay at fuel stations.
The central excise duty is levied by the central government and is uniformly applied across the country. This component remains one of the largest contributors to the overall fuel price structure and directly impacts nationwide fuel costs.
In addition to central taxes, each state imposes its own Value Added Tax (VAT) or Sales Tax on petrol and diesel. Since VAT rates vary from state to state, fuel prices differ across regions such as Delhi, Maharashtra, Tamil Nadu, and West Bengal, even on the same day.
Together, the central excise duty and state VAT often account for a substantial share of the total retail price, making taxation one of the most influential factors in fuel pricing.
Disclaimer: Tax rates on fuel may change based on government policies and budget decisions. Actual tax components can vary by state and over time.
