Petrol, Diesel Price Hike: Why Fuel Costs Differ In BJP And Congress-Ruled States? Explained

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Key points generated by AI, verified by newsroom

• Fuel prices rise, Centre blames state taxes for disparities.
• State VAT and cesses significantly impact final retail prices.

Petrol and diesel prices were hiked for the third time on May 23, taking the cumulative increase in fuel rates to nearly Rs 5 per litre over recent revisions. Amid criticism over rising fuel costs, the BJP-led Centre argued that retail fuel prices remain significantly higher in several Opposition-ruled states due to elevated state-level taxes.

While the Centre imposes a uniform excise duty across the country, the final price consumers pay at petrol pumps varies from state to state because of Value Added Tax (VAT), local cesses and surcharges imposed by individual state governments.

According to the report, states with the highest VAT rates levy effective taxes of 30 per cent or more, often adding extra per-litre charges and infrastructure cesses. In contrast, states with lower VAT rates impose comparatively smaller tax burdens, resulting in cheaper fuel prices.

Andhra Pradesh Tops Fuel Price Chart

After the latest revision, Andhra Pradesh recorded the highest petrol prices in the country at around Rs 114.72 per litre. The state, ruled by the Telugu Desam Party (TDP), a BJP ally, levies 31 per cent VAT along with an additional Rs 4-per-litre charge and road development cess.

Congress-ruled Telangana and Kerala followed closely, with petrol prices at approximately Rs 112.25 and Rs 112.24 per litre respectively, as per NDTV report.

At the same time, BJP-ruled states such as Madhya Pradesh, Rajasthan, Bihar and West Bengal also continued to record petrol prices above Rs 108 per litre in many cities, highlighting that high fuel prices are not limited to Opposition-governed states alone.

On the other hand, Delhi, Haryana, Uttar Pradesh and Gujarat, all governed by the BJP, remained among the states with the lowest petrol prices, with rates ranging between Rs 99 and Rs 100 per litre.

Which Parties-Governed States Have Highest Fuel Prices

Centre Defends Excise Duty Cut

The Centre also defended its earlier decision to reduce excise duty on petrol and diesel by Rs 10 per litre on March 27, 2026. Following the revision, central excise duty on petrol was reduced to Rs 3 per litre, while diesel excise duty was brought down to zero.

According to the report, the Union government claimed BJP-ruled states passed on the full benefit of the excise reduction to consumers, while several Congress and INDIA bloc-ruled states did not cut VAT correspondingly, resulting in higher retail fuel prices.

The report further noted that fuel price variation across India is largely driven by state taxation structures. States that impose VAT as a percentage automatically see taxes rise whenever base fuel prices increase. Additional cesses, local levies, transport costs and dealer commissions further widen the gap between states.

As a result, consumers in some states are paying Rs 10–15 more per litre compared to others despite uniform revisions in central excise duty.