Why is petrol so cheap in Bhutan?
GeneralClass 12AllAnswered 27 Mar 2026
Answer
Petrol is cheaper in Bhutan primarily because of subsidized pricing from India and zero VAT/sales tax on petroleum products. Bhutan imports all its petroleum from India at subsidized rates through special bilateral agreements. Additionally, Bhutan doesn't impose high excise duties or state taxes that India does Indian petrol prices include ₹30-40 per liter in various taxes. Bhutan's petrol costs around Nu 70-80 per liter (equivalent INR), while India's ranges from ₹95-110. The smaller market size allows easier subsidization. This price advantage extends to diesel and LPG. However, Bhutan controls fuel sales to prevent smuggling back into India.
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