[kumarvvr]

Historically, the higher taxes on petrol was used to subsidize diesel prices, because most of the agrarian sector and transport sector predominantly depends on diesel. Worldwide, diesel costs more than petrol (though by not that much). Some of the taxes also go towards subsidies for LPG, which is a major source of heating in many house holds in India.

However, taxes can come down. Geo-politically speaking though, it is in the interest of the govt. that the consumption of fuels is kept to a minimum, as we don't have any significant oil reserves.