As fuel prices recorded their fourth revision this month amid the ongoing West Asia crisis, a state-by-state comparison of retail petrol rates reveals a sharp divide along political lines — with Congress-ruled and INDIA bloc southern states imposing significantly higher value-added tax (VAT) than their Bharatiya Janata Party (BJP)-governed counterparts, according to data.

The Price Gap at the Pump

Petrol in Delhi is currently priced at ₹102 per litre, and in Gujarat at ₹101 per litre. By contrast, Telangana — governed by the Congress — has crossed ₹118 per litre, while Kerala stands at ₹114.9 per litre and Karnataka at ₹110.3 per litre. The differential between the cheapest and most expensive states amounts to over ₹16 per litre — a gap critics attribute entirely to state-level taxation decisions.

Six states currently have petrol at or below ₹102 per litre: Gujarat, Uttar Pradesh, Delhi, Haryana, Goa, and Assam — all governed by the BJP.

How State VAT Structures Drive the Difference

Andhra Pradesh charges 31% VAT plus ₹4 per litre plus a road development cess, pushing the effective rate close to 35%. Kerala levies an additional social security cess on top of its base VAT. Tamil Nadu and Karnataka also rank among the highest-taxing states on fuel nationally, according to available data.

This comes amid a cumulative upward revision of approximately ₹7.5 per litre across four days this month — described in reports as the 'smallest material upward movement' of any major economy outside Gulf producers that directly subsidise fuel.

The Central Excise Cut and State Pass-Through

When the Centre reduced excise duty by ₹10 per litre on both petrol and diesel on 27 March, BJP-governed states reportedly passed the full benefit through to retail prices. Opposition-ruled states, according to sources, did not make a corresponding reduction in their own VAT rates at the time.

Critics argue that opposition parties — including the Congress — have consistently called on the Central government to cut excise duty on fuel, while not reducing the VAT their own state governments levy on the same litre. The Congress has not publicly responded to these specific comparisons as of the time of this report.

Broader Context

Fuel pricing in India operates on a dual-tax structure: the Centre levies excise duty, while states independently set VAT rates. This means retail prices can vary by more than ₹15–18 per litre across state borders for the same commodity. The ongoing West Asia conflict has added fresh pressure on global crude prices, making the state-tax differential more visible to consumers at the pump.

With fuel costs directly affecting household budgets and logistics chains, the political debate over who taxes fuel more heavily is likely to intensify as prices continue to rise.