States have the fiscal room to cut taxes on petrol, diesel : SBI

States have the fiscal room to cut taxes upto Rs 5 per litre on fuel, a report from the State Bank of India NSE 0.62 % (SBI NSE 0.62 %) said. The states made Rs 49,229 crore from value-added tax (VAT) on fuel when oil prices were going up, but they will lose Rs 15,021 crore because excise duty was cut. As a result, they have flexibility to lower fuel costs through a reduction in state taxes, as profits exceed foregone revenue by Rs 34,208 crore.