Hyderabad motorists are paying the steepest fuel taxes in the country. Fresh data from Hindustan Petroleum Corporation Limited, obtained under the Right to Information Act, reveals that the Telangana government collects the highest Value Added Tax (VAT) on every litre of petrol and diesel sold among India’s major metropolitan cities.
VAT on Petrol in Hyderabad
As of June 1, 2026, the Telangana government pockets ₹28.99 per litre of petrol sold in Hyderabad—well above other metros. By comparison, Delhi collects ₹16.60, Mumbai ₹25.51, Chennai ₹22.12, and Bengaluru ₹24.54 per litre. The scale of this revenue is striking when scaled to sales volumes. Every 1,000 litres of petrol sold brings in nearly ₹28,990 for the state exchequer. At one lakh litres, the figures balloon to ₹28.99 lakh.
VAT on Diesel in Hyderabad
Diesel VAT collections stand at ₹21.46 per litre in Hyderabad, again higher than Delhi (₹13.91), Mumbai (₹16.53), Chennai (₹18.27), and Bengaluru (₹16.81). That translates to ₹21,460 for every 1,000 litres sold, or ₹21.46 lakh for one lakh litres.
Impact on Retail Fuel Prices
The heavy tax burden has pushed Hyderabad’s fuel prices to the top of the metro list. Petrol retailed at ₹115.68 per litre, compared with ₹111.17 in Mumbai, ₹110.88 in Bengaluru, ₹107.73 in Chennai, and ₹102.15 in Delhi. Diesel followed the same trend, at ₹103.81 per litre in Hyderabad, higher than Chennai (₹99.55), Bengaluru (₹98.79), Mumbai (₹97.81), and Delhi (₹95.24).
RTI Activist Calls for Relief
RTI activist Robin Zaccheus pointed out that successive governments since Telangana’s formation have kept VAT rates high, directly driving up retail prices. He urged the current administration to consider lowering VAT to provide relief to consumers.
VAT Share in Retail Price
HPCL’s breakdown shows VAT makes up 25.06% of petrol’s retail price and 20.67% of diesel’s in Hyderabad, underlining the significant contribution of fuel taxes to pump up prices.
Dealer Commission vs. Tax
Despite Hyderabad recording the highest dealer commission among the five metros, the amount remains a fraction of the tax component. Dealer commissions, by contrast, are modest: ₹4.57 per litre on petrol and ₹3.06 on diesel—tiny compared to the state government’s take of ₹28.99 and ₹21.46 per litre.
This data, obtained by RTI, highlights the disproportionate tax burden on Hyderabad residents, making fuel significantly more expensive than in other major Indian cities.
