1. Did you know taxes and charges on petrol are more than 100% of its cost

Did you know taxes and charges on petrol are more than 100% of its cost

Charges levied include transportation cost and dealer's commission while the taxes include those levied by the central government, toll taxes, VAT and 'Draught Cess' which was recently added by the Maharashtra state government.

By: | Published: April 25, 2017 6:52 PM
Out of a total retail cost of Rs 77.50 for a litre of petrol in Mumbai, taxes and charges account for Rs 47.96, which is a whopping 162.35% of taxes and other levies.

Out of a total retail cost of Rs 77.50 for a litre of petrol in Mumbai, taxes and charges account for Rs 47.96, which is a whopping 162.35% of taxes and other levies. Charges levied include transportation cost and dealer’s commission while the taxes include those levied by the central government, toll taxes, VAT and ‘Drought Cess’ which was recently added by the Maharashtra state government.

At current foreign currency exchange rates and crude prices in international markets, oil marketing companies buy petrol from oil refineries at Rs 29.54. While a litre of petrol costs Rs 77.50 in Mumbai, in Delhi it costs Rs 68.26 per litre. Among India’s neighbouring countries, petrol sells for, Rs 43.68 in Pakistan, Rs 50.95 in Sri Lanka, Rs 64.24 in Nepal and Rs 70.82 in Bhutan.

Experts believe that although the Rs three ‘Drought Cess’ by Maharashtra government will increase home delivery charges for goods and services, but it won’t cause an increase in prices of other items as petrol is not used to transport goods.

Here is a step by step guide on petrol is priced.

Oil refineries sell Petrol to Oil marketing companies at Rs 26.86 per litre.

Oil marketing companies add a Rs 2.68 per litre marketing charge.

A central government production fee Rs 21.48 is added to the cost.

Another charge of Rs. 0.20 is added to get the petrol to the fuel stations.

A toll fee of Rs 1.10 is charged in Mumbai, which brings the cost to Rs 52.32.

On this cost of Rs 52.32, 26% VAT is added along with additional taxes of Rs 9.00.

These taxes take the price up to Rs 74.92, the price at which fuel station dealer buys petrol from oil marketing companies.

The fuel station dealer is allowed a commission of Rs 2.58, which gives the final price of petrol as Rs77.50.

  1. A
    anbarasi
    May 3, 2017 at 2:09 pm
    thanks for the details lawrence sir
    Reply

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