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Nov 29, 2023

Navigating State-Wise Taxes on Petrol and Diesel

In India, the cost of owning a vehicle goes beyond just the purchase price and fuel expenses. State-wise taxes on petrol and diesel play a significant role in determining the overall cost of owning and operating a vehicle. For vehicle owners, understanding the impact of these taxes is crucial, especially when it comes to budgeting and motor insurance decisions. Let’s delve into the intricacies of state-wise taxes on petrol and diesel and their implications for motor insurance, particularly comprehensive car insurance.

Understanding State-Wise Taxes on Petrol and Diesel

When you fill up your car's tank, you're not just paying for the fuel itself; you're also paying various state taxes and levies. The rates of these taxes can vary significantly from one state to another, making it essential for vehicle owners to be aware of the tax structure in their region. Here are the tax structures for a few states:
States VAT on Petrol VAT on Diesel
Madhya Pradesh 29% + Rs.2.5 per litre 19% + Rs.1.5 per litre
Telangana 35.2% 27%
Assam 21.95% or Rs.16.80 per litre (whichever is higher) 20.88% or Rs.13.60 per litre (whichever is higher)
Delhi 19.40% 17%
Uttar Pradesh 19.36% or Rs.14.85 per litre (whichever is higher) 17.08% or Rs.10.41 per litre (whichever is higher)
Andhra Pradesh 31% + Rs.4 per litre 22.25% + Rs.4 per litre
Maharashtra (Thane, Navi Mumbai and Mumbai) 26% + Rs.5.12 per litre 24%
  To get a more updated and accurate understanding of these state-wise taxes, it's beneficial to refer to official sources. The Petroleum Planning and Analysis Cell (PPAC) provides detailed information on VAT (Value Added Tax), sales tax, and GST (Goods and Services Tax) rates for petrol and diesel across different states in India. Various informative sources offer insights into state-wise tax rates on fuel, helping vehicle owners make informed decisions. Understanding these taxes is particularly relevant for motor insurance.

The Impact on Motor Insurance

State-wise taxes on petrol and diesel have a direct impact on motor insurance. Comprehensive car insurance, which is a type of motor insurance providing coverage for third-party liabilities as well as damages to your own vehicle, is influenced by a range of factors, including the location where your vehicle is registered.

Premium Costs

The cost of comprehensive car insurance is determined, in part, by the geographical location where the vehicle is registered. States with higher taxes on fuel tend to add to the overall expense you would have to make towards your vehicle.

Claim Settlements

In regions with high fuel taxes, vehicle repairs can be more expensive.. It's essential to consider these factors when choosing the right comprehensive car insurance policy. Claims are subject to terms and conditions set forth under motor insurance policy.

Fuel Efficiency Matters

When you're aware of the state-wise taxes on fuel, you may make more fuel-efficient choices in your vehicle selection. A fuel-efficient car can help offset the higher fuel costs associated with regions that have high fuel taxes.

Risk Assessment

Insurers consider the local road conditions and traffic patterns when assessing risks. High fuel tax regions may have a different risk profile, which can affect the cost of your insurance policy.

Choosing the Right Comprehensive Car Insurance

To make an informed choice about comprehensive car insurance, you should consider insurance providers in your area. The right insurance policy can help you navigate the financial implications of fuel taxes and ensure that you're adequately protected on the road.


Explore insurance providers that offer coverage in your state. Check for reviews and customer feedback to gauge the quality of their service.

Comparative Analysis

Request quotes from multiple insurers. Compare the coverage, deductibles, and premiums to find the policy that best suits your needs.


If you're uncertain about which policy to choose, consult with an insurance expert who can guide you through the available options and help you make an informed decision.


Understanding the state-wise taxes on petrol and diesel is an essential part of managing the costs associated with vehicle ownership in India. It also plays a significant role in the decisions you make regarding motor insurance, particularly comprehensive car insurance. By staying informed about regional fuel tax rates and choosing the right insurance policy, you can navigate these financial considerations more effectively and ensure that you're protected on the road. By keeping the factors highlighted above in mind and referring to reliable sources like the Petroleum Planning and Analysis Cell (PPAC), you can make well-informed decisions about your motor insurance and address the financial implications of state-wise taxes on fuel. In doing so, you'll not only save on your vehicle expenses but also ensure that you have the right coverage to protect you and your vehicle in all circumstances.   *Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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