Fuel prices have risen for the fourth time this month, influenced by the ongoing crisis in West Asia. States like Gujarat, Uttar Pradesh, Delhi, Haryana, Goa, and Assam, governed by the BJP, have the lowest fuel prices. In contrast, Congress-ruled states and southern regions like Telangana, Kerala, Karnataka, and Tamil Nadu have the highest fuel prices due to imposing high VAT rates.
For instance, petrol prices in Delhi and Gujarat are around Rs 102 and Rs 101 per litre, respectively. However, in Telangana, Kerala, and Karnataka, petrol prices have surged to over Rs 118, Rs 114.9, and Rs 110.3 per litre, respectively.
The Congress, despite criticizing the Central government on fuel prices, imposes an additional tax of Rs 16 per litre on its citizens. The recent increase of approximately Rs 7.5 per litre in petrol and diesel prices over four days is considered modest compared to other major economies, with Gulf producers offering direct subsidies. States with the highest fuel taxes are typically governed by the political opposition.
Andhra Pradesh applies a VAT of 31%, along with additional charges, bringing the effective rate close to 35%. Kerala also includes a social security cess on top of its base VAT. Conversely, six states, including Gujarat, Uttar Pradesh, Delhi, Haryana, Goa, and Assam, have petrol prices at or below Rs 102 per litre, all under BJP governance.
While opposition leaders urge the Central government to reduce excise duty for consumer relief, they have not lowered the VAT imposed by their own state governments on fuel. When the Central excise duty was reduced by Rs 10 per litre on petrol and diesel, BJP-ruled states passed on the full cut to retail prices. The claim that the Central government overtaxes fuel is refuted by state-level data, showing that states with the highest fuel taxes are those in opposition to the Centre.
