The Centre collected more than Rs 16.11 lakh crore through taxes on petroleum products over the five financial years from FY22 to FY26. The figures were disclosed by Finance Minister Nirmala Sitharaman in a written reply to Parliament.
The latest data highlights the importance of fuel taxation to the Union's fiscal position at a time when petroleum products remain outside the Goods and Services Tax (GST) regime, allowing both the Centre and states to levy separate taxes on petrol and diesel. Central levies primarily comprise excise duties and cesses, while states impose value-added tax (VAT).
The figures underscore the sector's continued role as a major contributor to government revenues despite fluctuations in global crude prices and periodic reductions in excise duties. The disclosure came in response to a question in Parliament seeking details of revenue earned from petroleum product taxation over the past five years.
The Centre's petroleum tax collections remained substantial despite successive reductions in excise duty on petrol and diesel over the past few years. The tax regime for petrol and diesel remains unchanged, with the Centre collecting excise duty and states levying VAT, as the fuels are yet to be brought under GST.
The Petroleum Planning and Analysis Cell (PPAC) data also shows petroleum-related receipts include excise duties, customs duties, cess on crude oil, royalty and other levies, making the sector one of the largest indirect tax contributors to the exchequer.