Mumbai, June 11 -- Even as the Centre has urged states to cut Value Added Tax (VAT) on petrol and diesel to shield consumers from rising fuel prices, Maharashtra is unlikely to follow suit, with officials citing the state's fragile finances and heavy dependence on fuel taxes for revenue. Senior finance department officials said any reduction in VAT on petrol and diesel would significantly dent the state's revenues at a time when Maharashtra is grappling with a projected revenue deficit of more than Rs.40,500 crore and a debt burden expected to exceed Rs.11 lakh crore in FY 2026-27. The Centre had appealed to states to reduce VAT on petroleum products after slashing excise duty on petrol and diesel by Rs.10 per litre. The move came amid a recent rise in fuel prices triggered by the conflict in Iran, which has pushed up crude oil prices and stoked inflationary concerns. Maharashtra currently levies 25% VAT on petrol along with a cess of Rs.5.12 per litre, resulting in a tax burden of over Rs.25 per litre. This is among the highest in the country, second only to Telangana, which levies 35.2% VAT on petrol. "Our expected revenue from VAT on petrol and diesel is more than Rs.65,000 crore, accounting for around 13% of the state's projected tax revenue of Rs.5.14 lakh crore in FY26-27. Any reduction in VAT would place a significant burden on the exchequer," said a senior Finance Department official. While Maharashtra reduced VAT on Aviation Turbine Fuel (ATF) by 11 percentage points last month, bringing it down to 7%, officials said a similar concession on petrol and diesel is unlikely because of the much larger fiscal implications. The ATF cut itself is expected to cost the state around Rs.600 crore revenue loss annually. Officials noted that after the introduction of the Goods and Services Tax (GST), VAT on petroleum products and liquor remains among the few major sources of the state's own tax revenue. Petrol Dealers Association president Chetan Modi, however, said motorists deserve relief. He suggested at least a 5% reduction in VAT, arguing that the state is already earning higher revenues because VAT is levied as a percentage of fuel prices. "The government can always restore the higher rate once geopolitical tensions ease and crude oil prices stabilize," he added....