In India, petrol and diesel are not just a means of running vehicles, but are also a major source of income for the government. When you fill fuel at a petrol pump, its price includes not only the cost of oil but also many types of taxes. The central government imposes excise duty, while state governments raise their income through VAT. This is the reason why the prices of petrol and diesel appear different in different states. Let us know in this news how much the state governments earn from tax on petrol and diesel and which state is at the forefront in this.
In recent times, there were fluctuations in the prices of crude oil in the international market, due to which the burden on the common people started increasing. To reduce this, the central government made a big cut in excise duty. The duty on petrol was significantly reduced, while the tax on diesel was almost abolished. This decision provided some relief to the people and helped in maintaining stability in the market.
How much does the central government earn?
If we look at the figures, the government gets huge revenue from the petroleum sector. In the first 9 months of the financial year 2022 alone, about Rs 5.45 lakh crore was earned from this sector. Out of this, approximately Rs 3.08 lakh crore went into the account of the Central Government. It is clear from this that petrol and diesel are a strong pillar of income for the government.
Earnings of state governments and top states
State governments also earn a good amount of money by imposing VAT on petrol and diesel. In 2024-25, the states together will collect revenue of more than Rs 3 lakh crore. At the same time, in the first six months of 2025-26, approximately Rs 1.47 lakh crore has been earned. According to the data, in 2024-25 all the states together collected a revenue of about Rs 3,02,058 crore. At the same time, in the first half year (H1) of 2025-26 itself, this figure has reached approximately Rs 1,46,892 crore.
Talking state wise, big states like Maharashtra, Uttar Pradesh, Tamil Nadu, Karnataka and Gujarat have been ahead in this matter. In 2024-25, Maharashtra achieved revenue of about Rs 36,992 crore, Uttar Pradesh Rs 31,214 crore and Tamil Nadu Rs 24,861 crore. Even in the first six months of 2025-26, these states remain among the highest earners.
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