Rajasthan levies 28 per cent VAT on petrol and 18 per cent on diesel. After the latest hike, petrol is sold at `71.10 per litre in the state. The VAT imposed on petrol and diesel in most of the states, including Delhi, Uttar Pradesh, Haryana, and Punjab is less compared to Rajasthan. Only Madhya Pradesh has higher VAT of 23 per cent and 28.75 per cent on diesel and petrol respectively. A lower rate in the adjoining states has made people to purchase fuel from Delhi and Haryana.

On the other hand, the state government claims that around one-third revenue of the state comes from petroleum and petro-products. The reduction in VAT would lead to revenue loss to the state. The Congress had promised to reduce VAT on petrol and diesel in its poll manifesto in last Assembly elections.

Source: Daily Bhaskar, India,  dated 17/09/2011