Even as skyrocketing prices of petrol and diesel is a political hot potato, with the Opposition raising the heat on the NDA government at the Centre citing the large component of central taxes in these prices, state governments are quietly making a killing. With the state-level value added tax (VAT)\/sales tax being levied on an ad valorem basis, states\u2019 tax revenue from the two fuels rise in tandem with the increase in their prices. Elevated fuel prices, however, don\u2019t help the Centre much as the excise duties on petrol and diesel, through which it mobilises the bulk of the indirect tax revenue from the oil sector, are specific (quantity-wise). According to an FE analysis, since prices to the dealer (base prices) of petrol and diesel on September 3 were higher by 12% and 15%, respectively, from the levels on April 1, states\u2019 revenue saw a quantum jump. Maharashtra, for instance, collected Rs 5.49 crore more from sales tax on the two fuels on September 3 compared with what it garnered on April 1. Such extra daily receipts for Tamil Nadu was Rs 3.69 crore and for West Bengal, Rs 2.06 crore. Even the small city state of Delhi raked in extra daily revenue of about Rs 1 crore on September 3 from these taxes compared to the level four months ago. While central taxes used to be roughly 60% of the total indirect taxes on crude\/oil products, the rising prices are increasingly matching their share with that of state-level taxes. Apart from the specific excise duties on petrol and diesel, the Centre levies an ad valorem excise on aviation turban fuel and charges cess and customs duty on crude oil. As for states, while VAT\/sales tax on POL (petroleum, oil, lubricant) accounts for about 90% the tax revenue from the sector, the balance comes from royalties, extra crude oil cess, octroi and other levies. (From FY18, the taxes on petroleum items include the goods and services tax on naphtha, LPG and kerosene, which is shared between the Centre and states). In FY18, the Centre collected Rs 2,88,442 crore from indirect taxes on crude and oil products and another `59,416 crore from direct taxes (corporate income tax and dividend distribution tax). States among them have collected Rs 2,08,893 crore. The state government of Delhi was collecting around Rs 15.68\/litre on petrol sold on April 1, and this went up to `16.85\/litre on September 3. Similarly, the Maharashtra government collected `25.82\/litre on petrol on April 1 which rose to Rs 27.24\/ litre on September 3. The relentless rise in petroleum product prices \u2014 which are linked to global prices \u2014 continued over the past week. On September 7, retail petrol price increased by 48 paise and diesel price by 53 paise in New Delhi \u2014 these were among steepest one-day increases in the prices of these fuels. As the pricing of the two fuels are decontrolled, global price changes are factored in retail prices on a 15-day rolling basis. Prior to June 2017, state-run oil marketing companies \u2014 Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation \u2014 used to review retail fuel prices every 15 days. The central excise duties remained static at Rs 19.48\/litre on petrol and Rs 15.33\/litre on diesel since October last year when these taxes were cut by Rs 2 per litre. The current government increased excise duties nine times between November 2014 and January 2016 to increase its revenue when crude oil prices fell steeply and went below the $40 per barrel mark. However, now that the prices are hovering around $80 per barrel, the finance ministry earlier this week clarified that it cannot cut excise duty as it might affect this financial year\u2019s fiscal maths. To add to the Centre\u2019s woes, the dollar too has strengthened against the rupee and is hovering around the Rs 70 per dollar mark. To arrive at the daily VAT collection figures, FE relied on the Petroleum Planning and Analysis Cell\u2019s (PPAC) petrol and diesel consumption data for FY18 to compute the daily consumption of the fuels in the four select states \u2014 Delhi, Maharashtra, West Bengal and Tamil Nadu. (These states were selected since historical fuel price data for only these are officially put out.) While the PPAC data on share of these states in the domestic consumption of all petroleum products are available, we assumed that they may have a similar share in the consumption of petrol and diesel as well and arrived at these fuels\u2019 daily consumption levels in these states. Given the ad valorem VAT rates prevailing in these states and the retail fuel prices on the two days, the VAT incidence (`\/litre) for both days were estimated. Assuming the consumption to be the same on both days (petroleum consumption is almost price-inelastic and consumption doesn\u2019t differ much in such short periods), the tax collections on both days and the differences too were calculated.