The Centre may have urged states to reduce VAT amid rising fuel prices, but the Mahayuti government in Maharashtra is yet to take a decision on this, senior finance department officials confirmed. In the past, NDA-ruled states have responded by lowering state levies, although some still maintain higher rates than the average.
Officials pointed out that reducing VAT would be challenging for the state government given its tight financial situation. Maharashtra's outstanding debt is projected to reach Rs 9.32 lakh crore. Continuous borrowing to fund supplementary demands and welfare schemes like Laadki Bahin has also widened the deficit. The state finance department is headed by Chief Minister Devendra Fadnavis.
Recently, the state government reduced VAT on aviation turbine fuel to 7% from the earlier 18%. Currently, VAT on petrol is set at 25% and on diesel at 21%.
The opposition on Monday criticised the BJP-led Central government over the latest fuel price hike. Petrol and diesel prices in Mumbai were raised again on Monday. Petrol was revised from Rs 108.49 per litre to Rs 111.21, an increase of Rs 2.72. Diesel moved from Rs 95.02 per litre to Rs 97.83, up by Rs 2.81. Industry representatives said the latest revision brings the cumulative rise in fuel prices to about Rs 8 per litre over the past 11 days, following four consecutive hikes.
Shiv Sena (UBT) leader Priyanka Chaturvedi remarked that in Mumbai, petrol price “has reached shagun ka 111 number” and “diesel is reaching 100 in metros in the next price hike… which is likely in the next 24 hours.” State Congress chief Harshavardhan Sakpal noted that while crude oil prices are falling globally and Brent crude has dropped below $100, petrol and diesel prices continue to rise in India.
The NCP (SP) is planning a statewide protest over issues including fuel price hike and inflation. Party MP Supriya Sule said, “There is fuel shortage in the country, and many pumps have boards saying there is no petrol and diesel. We had warned the government six months ago. Rahul Gandhi and other opposition parties were saying fuel prices were going to increase. You can see our speeches in Parliament. But we were not listened to. We had said earlier that government had no planning, and it is now visible.”
Transporters expressed that frequent and incremental fuel rate increases create uncertainty for fleet operators and customers. They advocated for a one-time, transparent pricing decision to help businesses plan sustainable operating strategies, set freight structures, and assess viability, instead of recalibrating costs every few days.
Fuel accounts for nearly 55% of truck operating costs, transporters said, and repeated hikes compound other rising expenses such as tyre costs, insurance, tolls, maintenance, finance costs, and statutory compliances.
Bal Malkit Singh of the All India Motor Transport Congress said the impact extends beyond transporters and becomes a national supply chain issue. He cited reports from several regions indicating a substantial number of vehicles have been left idle due to higher operating costs and operational challenges, with estimated losses of nearly Rs 3,500 per vehicle per day in certain sectors.
