Telangana Fuel Charges Skyrocket: Petrol Hits ₹107.46/L

Telangana Drivers Face Soaring Fuel Costs as Petrol Hits ₹107.46/L

The financial strain on residents of Telangana, particularly in its capital city of Hyderabad, has reached a new peak as fuel prices continue their relentless climb. On September 11, 2025, the price of a liter of petrol in Hyderabad stands at a staggering ₹107.46, making it one of the most expensive cities for fuel in the country. This consistent price escalation, which has been ongoing for some time, is placing immense pressure on the state's economy and the daily lives of its citizens.

The Breakdown of Fuel Prices

The price of petrol at the pump is a complex mix of several factors, both international and domestic. The cost starts with the price of crude oil in the international market. India imports over 85% of its crude oil, making it highly susceptible to global price volatility. This includes the price of Brent crude oil, which is the international benchmark, and the exchange rate of the Indian Rupee against the US Dollar, as crude oil is traded in dollars. Any depreciation of the rupee against the dollar automatically makes imports more expensive.

However, the major contributor to the soaring prices in Telangana, and across India, is the heavy taxation levied by both the central and state governments. The retail price of petrol is a layered structure that includes:

• The Base Price: The cost of crude oil plus the costs of refining, shipping, and a small profit margin for the oil marketing companies.
• Central Excise Duty: A fixed tax imposed by the central government. While the central government has made some cuts in excise duty in recent years, these reductions have been insufficient to bring about a significant and lasting price drop.
• State Value Added Tax (VAT): This is a state-specific tax, and its high rate is the primary reason for the wide disparity in fuel prices across different states.
• Dealer's Commission: A small commission for the petrol pump owner.

The Telangana Anomaly: High VAT and Its Consequences

While the central government's excise duty is uniform across the country, it is the state's VAT that has made petrol in Telangana one of the most expensive in India. The Telangana Petroleum Dealers Association, led by its president Marri Amarender Reddy, has repeatedly highlighted that the high VAT rate is the main culprit. Unlike several other states that have reduced their VAT on fuel to provide relief to consumers, the Telangana government has not followed suit.

This high state tax has created a situation where neighboring states like Karnataka and Andhra Pradesh have significantly cheaper fuel. This price difference has led to what dealers call "border sales," where bulk buyers and even regular motorists from Telangana cross state lines to fill up their tanks. This practice has resulted in a substantial loss of revenue for the state. According to estimates by the Telangana Petroleum Dealers Association, the state is losing approximately ₹2,000 crore annually in revenue due to this outflow of business.

The Impact on the Economy and the Common Man

The skyrocketing fuel prices have a ripple effect throughout the economy.

• Inflation: Fuel is a fundamental input for transportation and logistics. When petrol and diesel prices rise, the cost of transporting goods increases, which in turn leads to higher prices for essential commodities, from vegetables to electronics. This contributes to general inflation, eroding the purchasing power of the common man.
• Increased Business Costs: For small and medium-sized businesses that rely heavily on transportation, the high fuel costs cut directly into their profits. This can lead to a reduction in services, an increase in prices for consumers, or, in the worst-case scenario, business closures.
• Household Budget Strain: For an average family, fuel is a significant and unavoidable expense. The rising prices force them to cut back on other expenditures, impacting their overall quality of life. For a daily commuter, the hike from ₹87 a few years ago to over ₹107 today represents a significant increase in their monthly budget.

The Call for Action

The public and various industry bodies have been vocal in their demands for government intervention. The opposition has consistently used the high fuel prices to criticize the government, arguing that it is placing an undue burden on the people. They have called on the state government to reduce the VAT on fuel, mirroring the actions of other states, and to bring petrol and diesel under the Goods and Services Tax (GST) framework.

Bringing fuel under GST would streamline taxation and potentially lower prices, but it has been a contentious issue. State governments are reluctant to do so as fuel is a major source of their revenue, and they do not want to cede control over this lucrative tax base to the GST Council.

Awaiting Relief

As of September 11, 2025, there has been no indication from the Telangana government that it plans to reduce the VAT on fuel. While the prices in Hyderabad remain stable for the past few days, they are at an all-time high, and the public continues to bear the brunt of the high taxation. The situation is a stark reminder of the complex interplay between global crude oil markets, national economic policies, and local tax structures that ultimately determines the price of a simple commodity that powers the daily lives of millions