CTI’s Proposal: Flat 5% VAT to Ease Fuel Prices

India’s fuel consumers are facing relentless price hikes, with petrol and diesel rates rising four times in just 12 days. The Chamber of Trade and Industry (CTI) has stepped in with a proposal: impose a flat 5% VAT on petrol and diesel for the next three months. According to CTI Chairman Brijesh Goyal, this measure could reduce fuel prices by ₹10–15 per litre, offering immediate relief to households and businesses.  

Currently, taxes—including excise duty and VAT—make up nearly half of fuel prices across states. With global crude oil prices elevated due to West Asia tensions, refining margins tightening, and the rupee weakening, India’s import costs have surged. Petrol now costs over ₹102 per litre in Delhi and crosses ₹113 in Kolkata, while diesel hovers near ₹100 in several metros.  

CTI argues that states must cooperate to ease the burden. Rising fuel costs are not only squeezing consumers but also raising transportation and input costs across industries, adding to inflationary pressures. The proposal comes at a time when businesses are struggling with the cascading effects of global volatility.  

This is not the first time India has faced such a crisis. In 2020, Brent crude prices collapsed below $20 per barrel, yet domestic fuel prices barely fell due to high taxes. CTI’s latest suggestion highlights the need for coordinated fiscal action to ensure global price movements translate into domestic relief.  

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