Which Indian States Pay the Highest & Lowest Petrol-Diesel Taxes?

In India, petrol and diesel taxes vary significantly across states. The highest fuel taxes are imposed in Telangana, Kerala, and Andhra Pradesh, while states like Gujarat and Goa have the lowest tax burden.

A recent SBI Research Report reveals that Southern states contribute the most to fuel tax revenue (~30%), whereas Eastern and Northeastern states pay the least (~7%-8%).

Let’s take a closer look at the states with the highest and lowest fuel taxes and how they compare.

📌 States with the Highest Petrol & Diesel Taxes

1️⃣ Telangana (Highest Tax in India 🚨)

✅ Petrol: 35.20% VAT
✅ Diesel: 27% VAT

🔹 Reason: Telangana levies the highest VAT on petrol and diesel to generate state revenue.

2️⃣ Kerala

✅ Petrol: 30.08% Sales Tax + ₹1/liter extra tax + 1% cess + ₹2/liter Social Security Cess
✅ Diesel: 22.76% Sales Tax + ₹1/liter extra tax + 1% cess + ₹2/liter Social Security Cess

🔹 Reason: Kerala adds multiple surcharges, including a Social Security Cess, making fuel expensive.

3️⃣ Andhra Pradesh

✅ Petrol: 31% VAT + ₹4/liter VAT + ₹1/liter Road Development Cess
✅ Diesel: 22.25% VAT + ₹4/liter VAT + ₹1/liter Road Development Cess

🔹 Reason: Andhra Pradesh imposes a high VAT along with road development cess, increasing fuel costs.

4️⃣ Maharashtra

✅ Petrol: 25% VAT + ₹5.12/liter additional tax
✅ Diesel: 21% VAT

🔹 Reason: Maharashtra has a fixed additional tax per liter, making fuel costly.

5️⃣ Karnataka

✅ Petrol: 29.84% Sales Tax
✅ Diesel: 18.44% Sales Tax

🔹 Reason: Karnataka's fuel tax is relatively lower than Telangana but still among the highest.

📉 States with the Lowest Petrol & Diesel Taxes

1️⃣ Gujarat (Lowest Tax in India ✅)

✅ Petrol: 13.7% VAT
✅ Diesel: 13.9% VAT

🔹 Reason: Gujarat has one of the lowest VAT rates on fuel, making it one of the most affordable states for petrol and diesel.

2️⃣ Goa

✅ Petrol: 21.5% VAT + 0.5% Green Cess
✅ Diesel: 17.5% VAT + 0.5% Green Cess

🔹 Reason: Goa imposes a small Green Cess but still has lower fuel prices than most other states.

📊 Regional Fuel Tax Distribution in India

Region	Fuel Tax Contribution
Southern States	~30% (Highest) 🚀
Western States	25% - 29% 🏭
Northern States	22% - 26% 🏔
Eastern/Northeastern States	7% - 8% (Lowest) 🏝

📢 Key Takeaway: South India pays the most in fuel taxes, while the Northeast enjoys the lowest tax burden.

💡 Why Do Some States Tax More Than Others?

🔹 Higher VAT = Higher Revenue: States like Telangana and Kerala impose high fuel taxes to fund public services and infrastructure.
🔹 Lower VAT = Affordable Fuel: Gujarat and Goa keep VAT low to support businesses and consumers.
🔹 Additional Cess & Surcharges: Some states add extra charges like Road Development Cess and Social Security Cess, making fuel even costlier.

📢 Final Thoughts: How Does This Impact You?

✅ If you live in a high-tax state (Telangana, Kerala, Andhra Pradesh):
🔹 Fuel prices will always be higher in your region.
🔹 You pay more per liter compared to other states.

✅ If you live in a low-tax state (Gujarat, Goa):
🔹 You benefit from cheaper petrol and diesel.
🔹 Transportation and goods delivery cost less, reducing inflation.

🚨 Solution: If you travel between states frequently, consider filling up fuel in low-tax states to save money.

📌 Did this surprise you? Which state do you think should reduce fuel taxes? Let us know! 🚗💨