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Taxes on petrol and diesel very high in India

June 5, 2008

We in India pay high taxes and duties on petrol and diesel, higher than some developed countries like the United States and some Europeon countries. We pay approximately 52 per cent tax on petrol (duties, taxes like customs, excise, sales tax, VAT, dealer commission) and 31 per cent on diesel. It doesn’t seem fair does it considering that incomes here are much lower than in developed countries!

The Economic Times has an interesting table which gives a comparison of the major countries of the world.

Petrol diesel taxes

The table does not reflect prices all over India as the price in Delhi has been taken to represent India, but the state of Delhi has the lowest taxes on petrol and diesel in the whole country! But even if we take Delhi’s price, the total is not a dollar as the dollar has fallen in relation to the rupee…so the price of petrol even in Delhi would be over a dollar even in Delhi.

From Outlook India I got this additional information:[article published March 2008]


Pakistan – 39 percent tax for petrol and 20 percent for diesel
Thailand – 36 percent tax for petrol and 24 per cent for diesel

Petrol and Diesel Prices in rupees
Sri Lanka – Rs 39.38 per litre price in and Rs 24.36 per litre for diesel
Pakistan – Rs 39.01 for petrol and Rs 27.39 for diesel
Bangladesh – Rs 35.80 for petrol and Rs 21.10 for diesel
Nepal – Rs 42.02 for petrol and Rs 33.31 for diesel
Philippines – Rs 32.56 for petrol and Rs 28.92 for diesel
Thailand – Rs 30.57 for petrol and Rs 28.29 for diesel
Canada – Rs 33 for petrol and Rs 36.22 for diesel
USA – Rs 26.34 for petrol and Rs 29.16 for diesel
South Korea – Rs 65.99 for petrol
Japan Rs 48.80 for petrol and Rs 41.47 for diesel.

I found a unique page on the internet set up by someone called Kshitij where he has compiled prices of petrol across cities and also details of prices across the world. These are just a few that I picked to share here:

Petrol prices in rupees per litre

  • Hyderbad [April 2008] – Rs 55/-
  • Bangalore [May 2007] – 52/-
  • Pune [Feb 08] – 51.46
  • Mumbai [March 08] – Rs 56
  • Kolkata [May 06] – 56.86
  • Coimbatore [May 06] – 47.47
  • Chennai [Dec 07] – 49.15
  • Delhi [Jan 08] – 44.50

[Update:] From Vishesh’s comment I got to know that the price of petrol in Chennai is Rs 55/- per liter today and in his comment Xylene has mentioned that the price in Bangalore today is Rs 58.47!! Xylene has also written about the BJP is protesting the price hike in petrol and diesel in Kerala but not in Karnataka…a case of double standards!

It is said that in India we pay such high taxes on petrol because barely 3 percent of our population pays income tax (agricultural income is free from income tax and others are too poor to pay) and therefore the higher duties and taxes.

However, it doesn’t seem fair that prices are rising again (petrol price by Rs 5/- a liter and diesel by Rs 3/-). The taxes are pinching us badly enough already…and this brings up the unpleasant question…where exactly is our money going?

Related Reading: Petrol Cess and Education Cess…where is it going
Growing population and lifestyles leading to high energy consumption
India Budget 2008 Highlights

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52 Comments leave one →
  1. June 5, 2008 9:10 am

    it now costs 55 Rs/- for a liter of petrol in chennai ! but i think it is good that the prices are rising.The PM has asked the states to reduce their share of taxes,lets hope they do it..

    • Juber permalink
      August 8, 2011 11:35 am

      In Sangli District todays rate of petrol is 70.32/- per litre

  2. June 5, 2008 9:35 am

    Vishesh, you are very generous! 🙂 But yeah, the state govts. need to reduce taxes pronto!

  3. June 5, 2008 9:57 am

    I think there needs to be more blog opinion asking the question – where does our money go? Indiauncut has some posts about misuse of money but otherwise not much opinion weighing in on it.


  4. June 5, 2008 10:17 am

    Why is there so much difference in the Petrol price in different states??

  5. June 5, 2008 10:28 am

    Amit, the taxes are different…in fact the money is going into the state’s coffers. I am really suspicious of where the money is going. I got these facts about Pune from an insider:

    Pune consumes 3.5 lakh litres of petrol daily and the money that the state govt is taking is close to Rs. 1 Crore daily!!

    Where is all this money going??? Has Pune’s infrastructure improved that much??
    Imagine the government take in the whole of Maharashtra!! It’s a swindle!! Too much to even imagine!

    And Rahul, I agree, we all need to demand from the govt. to know where this money is going!!

  6. vish permalink
    June 5, 2008 10:30 am

    “The taxes are pinching us badly enough already…and this brings up the unpleasant question…where exactly is our money going?”

    The progressive taxation we have is not really progressive…we take pride (false?) telling the world that we produce more billionaires when we have billions toiling! Again, the hike in petrol and diesel is not going to pinch those billionaires who are the ones who complain about the system while getting the maximum benefits out of it.

    What about the windfall profits tax? Again a favor to the corporates?

  7. vish permalink
    June 5, 2008 1:07 pm

    and now the news is aviation turbine fuel price has been slashed by 4.3% to save the industry (free market?) and the ‘poor’ air travellers of the country!

  8. June 5, 2008 1:19 pm

    Bangalore have proved itself to be the most expensive city in India now, the price of petrol being 58.47/litre (3 Rs more than other states). I think the only people who can afford petrol here are the rich (read politicians). they have crores and crores worth of property and cash in their bank. 😦
    I wonder what the goverment of karnataka is going to do to control prices in the state. or is the pary just going to show its agitation in the state of kerala? (Kerala is observing one day hartal today, declared by BJP)

  9. June 5, 2008 1:51 pm

    Thanks Xylene! We need to share this information so that people will know if their state govt is charging them too much. I am shocked to hear the high price of petrol in Karnataka. I always thought we in Mumbai were the worst off!
    I am going to add the information you and Vishesh have shared into the main post.

    Vish, true the rich won’t be affected much…but well their businesses will get affected.

  10. June 5, 2008 2:26 pm

    For the government petroleum products (except kerosene) are not essential commodities. Both Central and State governments get lot of revenue to full fill their demands made to public. Like free distribution of colour TVs to people in Tamil Nadu.

  11. June 5, 2008 3:03 pm

    Nita, thanx for the link up, there is a small update, today’s hartal is declared by both the LEFT and BJP in Kerala. Left is ruling the state now !!!!!!!!

  12. Raghav permalink
    June 5, 2008 6:54 pm

    The coming times can be dangerous in India. But still i don’t understand who to blame, our govt., American companies or OPEC. Anyways, the Left hartals will not help this time as it is min. increase as heard in the news.

  13. wishtobeanon permalink
    June 5, 2008 7:25 pm

    Hi Nita, a very good question – “where exactly is our money going?”. I wish there was some way the government would address and answer people’s concerns and questions. Unfortunately, there is a lack of transparency in almost all dealings and I don’t think the government would want to answer that question.

    That is the big problem, the lack of transparency and the govt. will never answer that question as you say. However the process has started and RTI applications are forcing the govt. to reply to people’s queries. There are a lot of people in India, groups, which are engaged in filing RTI applications but unfortunately even that process is slowing down due to the number of applications!! – Nita

  14. June 5, 2008 7:29 pm

    Thanks for providing so much information, Nita.

    I think we would have to bear with fuel price increases as mineral oil and natural gas are non-renewable sources of energy and will run out sooner rather than later, so their prices will keep increasing. We cannot stop that but we can switch to alternate sources of energy or switch to more fuel efficient vehicles. General Motors was forced to shut down four factories in North America that manufactured outdated, humungous, low technology, fuel-guzzling, fume-spewing SUVs and pick-up trucks.

    The Tamil Nadu government has decided to cut the tax on diesel while the Kerala government has decided to cut the tax on both petrol and diesel, but the overall effect will remain the same as the cuts constitute only a negligible portion of the fuel price.

    I don’t mind paying taxes to the state government on every litre of fuel that I buy as I know that it will be used for the development of my state, for building public transport systems in my city and for the benefit of the people rather than imposing something on the people of other states.

    Also, Nita, it may not seem fair to us, but the fact is that India imports around 75-80% of her oil needs. So unless we take determined steps to move away from our oil-dependent economy, the Arab countries and the notorious American oil companies that constitute the oil mafia of the world will continue to take us for a ride! I guess it is time to sign the IPI pipeline deal, the TAPI pipeline deal and other deals for oil and natural gas with the CIS and Latin American countries to break free of the shackles put on us by the criminal oil mafia.

  15. June 5, 2008 9:58 pm

    There was a bit of an essay I read recently – The best way to get out of the price rise of Petrol would be to hike the price to the maximum possible levels! That way people would seriously start looking for alternative sources of energy, which they would not, if they are comfortable. So, if we make the price of petrol 150 per litre, the essay claimed, we would get one step ahead in solving the crisis. Maybe it is true! We need to create a crisis to solve it! Just a different view point, and it is not mine!

    Destination Infinity.

  16. June 5, 2008 10:15 pm

    Raghav, true one doesn’t know whom to blame! But as you said, the increase was mandatory. Now with the increased price, the govt oil cos will be able to survive as they can charge a higher price for the petrol they give to retailers..

    Raj, thanks. Sure we need to do that…and the world is trying for this. All countries are trying as they know the oil is going to run out. However I don’t have that much faith in the Maharashtra govt as you have in your TN govt. Actually I never see things in black and white, to me it’s all gray and while our govt. has some good points, I know there is corruption too.

    Destination Infinity, well I guess that’s human nature, when there is a crises then we all start to get fired up. However a lot of research is on in many countries on alternative fuels to be put into use in a large scale and as cheap as possible. There are countries which have the money and the will to do it.

  17. June 6, 2008 5:49 am

    i just read on Thomas Smicklas blog
    India is a maze of conflicting rules, regulations and corruption that twists democracy to produce a constant squeeze on companies to feather the nests of the ruling class and tossing a bone here and there to the massive welfare state through oppressive taxation, employment demands and playing the old game of “west vs. east” in the political and economic arenas.

    and he is so right
    We dont like it easy because transparency makes it easy to track all the fudging of data. they charge a 52% tax and then give subsidy that mostly benefits a few

    Sadly even after such heavy taxation the subsidy is not given in cash but in bonds – which is like putting the load on future generations.

    What worries me more is governments reckless and uncontrolled spending that has now pegged the overall fiscal deficit close to 10% – and the last time it was there our country had a balance of payment crises

  18. June 6, 2008 5:56 am

    nita overall it is a good step but too little too late
    cause the omcs are almost ruined at the rate the subsidy is being forced upon them.
    and many rich people are switching to diesel cars, so the measure has little effect as the demand doesn’t decrease, that much.

  19. June 6, 2008 9:15 am

    Firstly, that image clearly says it’s 2006 data!!! 2006 oil prices were _much_ lower than persent.

    So, some more correction —

    US gasoline price has crossed $4/gallon in most states. In California it is – $4.25/gallon (translates to ~Rs48/litre

    Diesel is $5/gallon (= Rs56/liter)

    Moreover, US taxes are 11% on both diesel and petrol
    See here –

    Also, this image more or less shows the full picture of prices around the world

    Thanks for that Vivek! There are already 2 Viveks who visit this blog and as you are not one of them, welcome. 🙂 – Nita

  20. wishtobeanon permalink
    June 6, 2008 6:01 pm

    Maybe its time to seriously start thinking about alternatives for petrol or diesel – environment-friendly ones – in India.

    Thanks for the response! Yep, that’s what we are doing…in fact India has an electric car called Reva and a company called Ajanta is plannign one too. Hasn’t caught on in a big way though… – Nita.

  21. Raghav permalink
    June 6, 2008 6:46 pm

    Nita, i still don’t understand this situation. Isn’t the govt. doing a right thing by protecting its oil companies by raising the price? On the other side it says even after increasing the prices , the govt. companies will still be going into losses worth hundreds of crores/day which will compensated by issuing oil bonds.

    Yes, the government is doing the right thing…or rather they are doing something which they have no choice but to do otherwise the public sector companies which are already making losses will go into further losses and will have to shut down one day! They are getting compensated on paper as you said with oil bonds but they don’t have what you call working capital, money to run their business and therefore the govt. has now allowed them to raise the price they sell at, which is a reasonable enough price. But the govt. imposes high taxes on the petrol and that is why we are paying as much as consumers in many rich countries. – Nita.

  22. June 7, 2008 3:03 pm

    it is such an eye opener to the unfair situation we are subjected as a nation and particularly the middle class, salaried class.
    In cities like Bangalore, the government better absorb the tax for its failure to provide a decent public transport system and hence forcing us to own private vehicles and consume petrol.
    And the increase in the price of LPG is going to hurt the lower middle class severely.

    Usha, you have said something that I agree with. The state govts. are taking taxes and we want them to be used properly and we want proper infrastructure. What is the use of taking taxes when they are not being utlized properly? I would like the govt. to account for every penny they take from us! – Nita.

  23. June 7, 2008 11:08 pm

    I was out the whole day and was sad to read this unpleasant exchange between Vivek M and Raj, together will personal comments. Vivek M, I am afraid the conversation you have initiated is irrelevant to this subject. Also to make statements which bracket people from one region or community are not permitted on this blog as they are considered divisive and communal. Please read my comment policy. Also your statements seem to me blatantly false (like for example that only north Indians have united this country and stuff like that are not just false but also childish. This statement of mine will stay but I am afraid all irrelevant and false comments on this topic are being deleted. (I’m sorry Raj I will have to delete your responses to Vivek M too).

  24. June 8, 2008 2:11 am

    Please don’t say sorry, Nita. It is not your fault. It is not my fault either as I was only replying to certain comments. I always knew that you were going to delete the comments.

    Also, I hope you look at my comment in the other post “Agitate, . . . ” in a lighter vein 🙂

    On the other hand, I feel sorry for making you sad to see me take part in an unpleasant exchange in this post, but I hope you understand.

    I understand Raj so don’t worry. Perfectly so. That is why I apologised to you. – Nita.

  25. June 8, 2008 12:18 pm

    Well you know what i hate the people who start these strikes…i had to walk 3-4 Kms on an empty stomach….(i have just written about it)

  26. vivek mittal permalink
    June 9, 2008 10:38 am

    I have no intention to induldge in debate with anyone…..those who think i made any false statement shuld see one particular comment which says that taxes pays to Govt of India are not spent on development and spent on “imposing something on someone”………….THIS COMMENT IS STILL THERE AND STRANGELY WAS NOT CONSIDERED AS FALSE

  27. June 9, 2008 11:44 am


    The notorious criminal linguo-fascist politicians and their bureaucratic stooges from certain states spend a huge amount of taxpayers’ money to impose a totally unnecessary language on the people of other states! Anyone who denies it speaks falsehood!

  28. vivek mittal permalink
    June 9, 2008 11:52 am

    The great leaders who took over the country from 1947 onwards made it sure that democracy is deeply embedded in the culture of this country…..and India is respected throughout the world for it’s democratic traditions.
    Those who dont fave faith in their country and govt and dont want to pay taxes to their country…. have to change for the betterment of our country

  29. vish permalink
    June 9, 2008 2:03 pm

    VM, things are changing…go through this link.

  30. June 9, 2008 5:37 pm

    India is respected for her democratic traditions because of the places where democracy exists in the country . . . the whole world knows of places in India where goondaism, thuggery and hooliganism exist!

    Raj, this has no connection with the post. I know you are responding to another commentator but after he reads it I intend to delete this and any responses to this. If it was just casual conversation it was different….but it is leading to unpleasantness and flaming, and I don’t want that here. – Nita.

  31. June 9, 2008 5:48 pm

    It is ridiculous to see someone claiming that he pays taxes and others don’t. What a shame, it shows his real attitude, he wants to take away the taxes of others to impose a totally unnecessary language on the people of other states. There is no hope for India if such people do not change.

  32. June 9, 2008 5:50 pm

    What about the comment of one particular person that was made at 11.52 am, Nita?

    Raj, that comment has been edited. Read it carefully, I don’t see anything offensive in it…now. – Nita.

  33. vivek mittal permalink
    June 9, 2008 6:06 pm

    \\ India is respected for her democratic traditions because of the places where democracy exists in the country \\

    again people are trying dividing country in seperate entities, it’s their habit

    By democracy i mean…The union Govt, which is elected by the people and for the people

  34. June 9, 2008 6:07 pm

    Okay, Nita, but one particular person seems to deliberately misquoting my comments! Here is what I said:

    // I don’t mind paying taxes to the state government on every litre of fuel that I buy as I know that it will be used for the development of my state, for building public transport systems in my city and for the benefit of the people rather than imposing something on the people of other states. //

    It shows that apart from the taxes that I pay to the central government – not all of which is used for the development of the country (but is siphoned off as kickbacks and bribes by certain corrupt people), I am happy to pay taxes to my state as I know it will not be used to impose one particular regional language on the people of other states!

  35. June 9, 2008 6:10 pm

    India is respect throughout the world only because of the democracy that flourishes in the regions of India where taxes are used for the development of the country rather than imposing something on the people of other states!

  36. June 11, 2008 1:18 pm

    I don’t really understand why government of karnataka impose maximum duty on fuel.with additional entry tax 5% and 28% sales tax on fuel. people suffer from paying more than 10 rs per lit compared to 1 lit of petrol compared to delhi. is this worth for any person staying in any part of karnataka. Being it hub may be people sitting in only bangalore can bear this. Now coming to exise duty added by central govt, they relaxed only 1 rs per lit. don’t they know just going fuel prices 5 & 3 rs per lit will directly increase the cost of each and every thing as all goods are transported across by trucks. Now being in Opposite party like BJP objecting central govt for price hike but not giving any relaxation from their end in karnataka, are they really not playing just politics, or do they really care for their people. and in Kerala they do “Bandh” to protest. why this double game, parties just play with taking some people with them, but one is really willing to loose their share of benefit.

  37. Prateek permalink
    June 15, 2008 3:15 am

    Taxes are high, but subsidies are higher. Until the recent price hike, petrol prices had not budged since 2005. Price of crude oil has gone up three fold in that period.

    True Prateek, but if you look at it from the consumer’s point of view then all he cares about is the fact that he is paying as much as a consumer in a rich country. – Nita.

  38. Raj permalink
    June 19, 2008 1:17 pm

    We have to stop paying double taxes, and we have to strike the hike in petrol price. or all people in india should stop buying petrol for one day and see the result….


  39. Raj permalink
    June 19, 2008 1:24 pm

    We the people pay tax and the Political people become rich… No developments in country why? Promises are broken by poltical people why? still there is no solution for poor people why? all bcoz of we people dont raise our voice…….

  40. dimpal permalink
    February 9, 2010 5:30 pm

    hello ,

    I want to know tht is it true tht petrol n diesel prices are calculated considering National capital as center, for example petrol price in Gujrat will be higher than Rajasthan and price in Rajasthan will be higher than Delhi.. Does delhi having the lowest petrol rates in India ??

  41. lokesh singh permalink
    July 4, 2010 8:54 pm

    goverment have to decrease taxes on fuel to be in india otherwise people will come on road n will fight to decrese price……

  42. varinder permalink
    July 5, 2010 11:39 am

    We in cities pay tax and the money is used in villages where people dont pay tax.We in cities never get even 50% benifit of the tax amount we pay, there is infrastrucure problem, water problem etc in cities.large proportion of tax fills pockets of babus and politicians.NO USE OF PAYING TAX IN INDIA.

  43. Baljit permalink
    February 1, 2011 11:15 am

    People are fools to keep the same congress gov in for rule. we should learn something here that dont choose gov consequtively coz if done so they will be confident and will not care for public coz they know thier seat is safe. Do u know Aircraft White Petrol is much cheaper then ours vehicles. Think where we are heading too… The future of Specially India is totally uncertain. We are living in scope of Blessing of God if something bad happens in India we stand no chance of survival.

  44. Dennis permalink
    February 25, 2011 9:21 pm

    Kerala its 62 now

  45. sumanth permalink
    June 1, 2011 2:30 pm

    in India petrol tax is high but so many middil class peoples are living in india .we are selecting the government but G.V not doing any thing for people. dint use petrol for one day India they can make it easily.

  46. biplov permalink
    July 27, 2011 2:19 am

    why the pertrol price is more the other fuel if some one can explain with example

  47. chandra prakash meena permalink
    September 22, 2011 11:30 am

    Indian govt. 2009 me bi yahi khati thi ki hame loss ho raha hai jab petrol price 45 /- tha or ab 2011 me bi yahi bolti hai….jabki price 70/- hai……………………………

  48. Dilip permalink
    May 24, 2012 9:06 pm

    Can government of India justify the petrol tax that how they spend this tax money? Or where they use this tax money, because this is humongous amount,,, and public should make sure that not even a single penny is spent to maintain the luxury of our so called leaders,, this is very important

    • Dilip permalink
      May 24, 2012 9:12 pm

      All member parliaments and members of legislative assembly should quit using government vehicles and they should fill their tanks on their own money no govt expenditure should be done on petrol


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