Himachal Fuel Cess Bill Passed: Govt to Levy on Petrol, Diesel for Orphans, Widows; Opposition Walks Out
Shimla, March 23,
Himachal Assembly passes fuel cess bill on petrol and diesel to fund welfare for orphans and widows while opposition walks out in protest.
The Himachal Pradesh Assembly on Monday passed the Himachal Pradesh Value Added Tax (Amendment) Bill, 2026, paving the way for the introduction of an ‘Orphan and Widow Cess’ on petrol and high-speed diesel to fund welfare schemes for vulnerable sections. The Bill was cleared amid a walkout and strong protest by the Opposition BJP members.
Chief Minister Sukhvinder Singh Sukhu, who also holds the finance portfolio, said the amendment seeks to create a dedicated and sustainable funding mechanism to support orphans and widows in the state. He underlined that the government intends to provide financial security and expand welfare programmes for economically weaker beneficiaries through a ring-fenced fund.
Also read:Himachal cabinet approves Orphan-widow cess, Pension reforms
The legislation proposes insertion of a new Section 6-A in the VAT Act, enabling the state to levy a cess of up to Rs 5 per litre on petrol and diesel at the point of first sale. However, the Chief Minister clarified that the levy would be imposed in a calibrated manner and kept minimal, possibly in the range of a few paise, to avoid burdening consumers. He assured the House that fuel prices in Himachal Pradesh would remain competitive with neighbouring states such as Punjab and Haryana.
Sukhu also pointed out that the Centre currently levies cess of about Rs 37 per litre on petrol and Rs 28 per litre on diesel, and argued that states require similar fiscal tools to mobilise resources for targeted welfare. He added that revenue from the proposed cess would be credited to a dedicated Orphan and Widow Welfare Fund and used exclusively for social support initiatives.
The Opposition, however, strongly opposed the move, arguing that the cess would push up fuel prices and trigger inflationary pressure. Leader of Opposition Jai Ram Thakur termed the timing inappropriate, citing volatility in global crude oil prices due to the West Asia situation. He warned of a cascading effect if other states follow suit.
BJP members, including Randhir Sharma, Trilok Jamwal and Satpal Sati, contended that higher fuel prices could divert consumers to neighbouring states, adversely affecting Himachal’s revenues. They also argued that even intended beneficiaries owning vehicles would end up paying the cess.
As the treasury benches defended the measure as a welfare-oriented reform, Opposition members staged a walkout and protested against what they called an “anti-people” tax. The Speaker clarified that the levy was a cess and not a VAT increase, and indicated that the effective hike would remain limited
With the passage of the Bill, the state government has taken a significant step towards linking fuel consumption with social welfare financing, even as political divisions over the move remain sharp.
About the Author
The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.
