Tax Differences: Why Indians Pay More For Petrol Than Neighbours?
New Delhi: Have you ever wondered why Indian customers continue to pay more for fuel even as its several neighbouring countries are selling petrol at significantly lower prices?
Amid the global volatility in the oil price due to the ongoing geopolitical tension, India charges Rs 21 more than petrol prices paid by people in the US as well as neighbouring Pakistan, a recent infographic prepared by Times of India citing global petrolprice.com showed. The chart has since gone viral on social media, with people wondering about the heavy taxes imposed on fuel in the country. Indians pay nearly double the cost of Bhutan for the fuel.
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When Pakistan charges Rs 80.4, United States Rs 79.4, China Rs 94.5, Bangladesh Rs 85, Bhutan Rs 58.8 and Libya and Iran less than Rs 2.5, Indians pay between Rs 101 and 108 in the country, though there is a slight variation in the Union Territories such as Chandigarh.
Several users on X pointed out that despite Bhutan being a major buyer of petrol and other oil products from India from companies like Indian Oil Corporation Limited (IOCL) and Bharat Petroleum Corporation Limited (BPCL), Indians pay nearly double the price of the people in Bhutan. Bhutan’s major oil supplier has been India for a long time.
India sells petrol to Bhutan but still people in Bhutan Pay less than Indians, what a shame
— Rohanchandgadkar (@Rohanchandgadk1) July 7, 2025
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Despite all this, why are the fuel prices so high in India compared to its neighbours?
The primary reason for the price hike in India is the tax imposed by the government in the country. The taxes include central excise duty, state VAT/sales tax, and dealer commissions. While Iran and Libya have astronomically low petrol prices due to their domestic production, India has to import approximately 90% of its crude oil from various countries, contributing to the price hike.
However, it is true that India imposes more taxes than its neighbors for oil, making the products more expensive comparatively. Despite high taxes, many wonder where the tax money goes, highlighting the low-quality infrastructure in the country.
With low-quality infrastructure, where is all the tax money going?
— Naveen (@_naveenish) July 7, 2025
Notably, it is also important to note that the high charges also ensure that fuel rates do not fall drastically even when international crude oil prices are low. India follows a dynamic fuel pricing system where charges are revised daily.
#STATOISTICS | Indians pay Rs. 21 more for 1 L of #petrol than Americans.
The difference in prices across countries is due to various taxes and subsidies. More details 👇 pic.twitter.com/yNG5KHIEtz
— The Times Of India (@timesofindia) July 7, 2025
