Petrol, diesel to cost more in Himachal Pradesh as ₹0.60 Widow and Orphan cess kicks in

Shimla: Petrol and diesel will cost slightly more in Himachal Pradesh after the state government imposed a 60-paise-per-litre Widow and Orphan Cess, effective from midnight on August 11.

The levy applies to petrol and high-speed diesel and will be collected at the first point of sale in the state. The State Taxes and Excise Department issued the notification on Tuesday with the approval of the Council of Ministers.

The move creates a dedicated revenue stream for welfare measures benefiting widows and orphaned children, but has also raised concerns among motorists, taxi operators and fuel dealers over the additional burden.

Why has Himachal introduced the cess?

The levy follows an amendment to the Himachal Pradesh VAT (Value Added Tax) law passed by the state Assembly earlier this year. The amendment gave the government the power to impose a Widow and Orphan Cess of up to ₹5 per litre on petrol and high-speed diesel.

The government has now fixed the rate at 60 paise- well below the permitted ceiling.

The proposal was introduced by Chief Minister Sukhvinder Singh Sukhu during the March 2026 Budget Session. The government said a dedicated cess would provide a more predictable source of funding for welfare programmes for widows and orphaned children rather than relying entirely on annual budget allocations.

What the new cess means for motorists

The cess is being charged at ₹0.60 per litre on both petrol and high-speed diesel, in addition to existing taxes.

The impact on individual purchases is relatively small: a 10-litre purchase will attract an additional ₹6, while a 40-litre fill-up will cost ₹24 more. For a 50-litre tank, the additional cess would be ₹30.

Following the new cess, petrol prices in Dharamshala have risen by up to 71 paise per litre, while diesel prices have increased by up to 69 paise, according to the information provided.

The petroleum dealers' association has reportedly described the additional levy as unjustified and warned that motorists in border areas could choose to purchase fuel from neighbouring states if prices become more attractive there.

Such a shift could potentially affect fuel sales in Himachal Pradesh and in turn, state revenue from existing fuel taxes.

A Dharamshala taxi operator said higher fuel costs could further squeeze already limited earnings. Taxi operators have not increased fares so far but may reconsider if fuel prices continue to rise.

Residents have also voiced concerns about the cumulative impact of repeated levies on lower- and middle-income households.

Government defends welfare objective

Congress MP Sukhdeo Bhagat defended the decision, arguing that Himachal Pradesh has faced major financial pressures following disasters and has limited revenue sources.

He said the additional taxes were intended for welfare measures rather than unnecessary expenditure.

With the cess now in force, the government faces the challenge of balancing a dedicated source of funding for vulnerable groups with concerns over fuel costs, inflation and revenue leakage to neighbouring states.

With agency inputs