Why fuel prices in India are a mix of taxes

India Mar 27, 2026

The government just cut the special additional excise duty on gasoline and diesel: gasoline's excise is now ₹11.90 per liter (down from ₹21.90), and diesel's is now ₹7.80 per liter (down from ₹17.80).
Even with these cuts, you are unlikely to see a change at the pump because the government is covering the extra cost from rising global oil prices to keep things steady for everyone.

What goes into the price of fuel?

Fuel prices in India are a mix of central excise duty, state VAT (which changes depending on where you live), and dealer commissions.
For example, after the recent cuts, gasoline excise is now ₹11.90 per liter (down from ₹21.90) and diesel's is ₹7.80 (down from ₹17.80).
VAT can really vary: Delhi charges about ₹15 on gasoline, while Mumbai goes by percentage.