May 25, 2025 – Rajasthan, India: Soaring fuel prices in Rajasthan, exacerbated by some of the highest tax rates in the country, have triggered a mass movement of consumers toward neighboring states like Punjab and Haryana, where petrol and diesel are significantly cheaper. The widening price gap is not only eroding state tax revenues but also severely impacting the business of local fuel dealers.
Long Queues at Border Fuel Stations
In border districts such as Sri Ganganagar and Hanumangarh, it’s now a common sight to see vehicles lined up at petrol stations just across the state border. On Abohar Road, merely 8 kilometers from Sri Ganganagar, petrol stations on the Punjab side are witnessing a constant stream of vehicles. Some individuals are even transporting fuel in drums and cans, reselling it in Rajasthan without proper permits — a growing concern for authorities.
Black Market Boom Among Small Traders
It’s not just individual consumers taking advantage of the price differential. Small-scale traders are also purchasing cheaper fuel in bulk from Punjab and Haryana and distributing it illegally across cities like Bikaner. This unauthorized trade is conducted without any official licensing or tax compliance, leading to a sharp decline in legitimate sales and significant loss of state revenue.
Tax Policy at the Root of the Crisis
Rajasthan imposes some of the highest fuel taxes in India. In contrast, neighboring states maintain relatively lower tax rates, making fuel considerably more affordable. For example, petrol in Haryana can be up to ₹10 per liter cheaper than in Rajasthan. This substantial difference has made it economically viable for border residents — especially those who commute daily — to refuel outside the state.
Situation Similar in Hanumangarh
The district of Hanumangarh mirrors this pattern, with villagers from areas like Chautala, Ashakheda, and Abubshahar frequently crossing into Haryana to buy fuel. With the border just 4–5 kilometers away, the convenience and cost-effectiveness make this an appealing option, even for bulk procurement.
Dealers Call for Immediate Tax Reforms
Ashutosh Gupta, President of the Sri Ganganagar Petrol Dealers Association, emphasized that this is not a new issue. “We’ve repeatedly urged both state and central governments to reassess the current tax structure,” Gupta said. “Unless the Rajasthan government lowers fuel taxes to match neighboring states, illegal fuel movement will continue. Cosmetic enforcement alone won’t solve this.”
Shrinking Revenue, Struggling Businesses
The state’s coffers are taking a direct hit. With more fuel being purchased outside the state, Rajasthan is losing substantial tax income. Legitimate petrol station owners are also suffering. “When customers can save ₹8 to ₹10 per liter just across the border, why would they buy from us?” questioned a local dealer. “This puts our businesses at serious risk.”
Concrete Steps Needed to Tackle the Crisis
Experts say the solution lies in bold policy reforms. Aligning fuel tax rates with neighboring states could reduce cross-border smuggling, restore consumer confidence, and boost legitimate sales. Additionally, stricter surveillance and enforcement across border checkpoints are essential to curtail illegal fuel transport.
Until these issues are addressed, Rajasthan’s fuel sector faces continued instability — with financial losses to both the government and lawful business operators.
Disclaimer: This article is based on publicly available information. For official policies and regulations, please refer to authorized government sources before making decisions.
