Many state governments have imposed value added tax (VAT) of petrol and diesel prices which leading to an exponential increase in retail rates.

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Many state governments have imposed value added tax (VAT) on petrol and diesel.

One of the challenges the state governments are facing owing to the lockdown is to upkeep its monetary reserves as majority of businesses are not operating in accordance with the nationwide lockdown. At a time when state welfare schemes have an even more important role to play in order to take care of the needy, gathering sufficient fund is a big issue and to procure it several states have taken certain steps. Many state governments have also imposed value added tax (VAT) on petrol and diesel prices leading to an increase in retail rates.

Also Read: Excise Duty Hiked On Petrol By ₹ 10 Per Litre, Diesel By ₹ 13

Regions like Delhi-NCR, Chandigarh, Bengaluru, Mumbai and Pune were among the first ones where fuel prices went up as soon as the lockdown was implemented given the high population of migrants and labours in these areas who would be dependent on the government for rations and daily meals. As far as states and union territories (UTs) are concerned, Delhi, Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh, Punjab, Haryana, West Bengal, Tripura, Goa, Rajasthan, Meghalaya, Assam, Nagaland and Arunachal Pradesh have increased VAT on petrol and diesel.

Also Read: Petrol Price Hiked By ₹ 1.67, Diesel By ₹ 7.10 Per Litre In Delhi Due To Increase In VAT


According to a PTI report, the government has hiked excise duty by a record Rs 10 per litre on petrol and Rs 13 per litre on diesel to procure estimated ₹ 1.6 lakh crore of additional revenue. The excise duty on both petrol and diesel has gone above 69 per cent after the fresh hike which is highest in the world. Despite crude oil prices in the global market slumping to a record low, the gains have also not been passed on to consumers in a bid to procure fund during the crisis situation.

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