Petrol prices vary across Indian states due to three critical factors: tax regulations, transportation costs, and political health. Different states in India have different tax laws. Petroleum derivatives are taxed differently by the state and central governments. A state with a lower tax rate charges a lower price for diesel and petrol. Transportation costs have an impact on petrol prices. The distance travelled from refineries to dealers is increased. A shorter distance is charged a lower price than a longer distance. Another critical factor is political stability. A shift in rolling government may cause existing tax structures and subsidies to increase or decrease.