Petrol price dropped in National Capital
Fuel prices rose 23 times in a row since May 4, 2021. To date, the rates already hit the century per liter in several cities and the number is inching towards the three-digit figure every time. Up until December 2020, people were able to differentiate the rates boundaries between petrol and diesel. Survey shows, diesel rates credit slightly cheaper than Petrol rates.
Crude Oil Prices And Taxes
State-run oil refiners such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum revise the fuel rates daily, by taking into account the crude oil prices in the international markets, and the rupee-dollar exchange rates. Any changes in petrol and diesel prices are implemented post 6 AM every day.
India imports about 80% of its petrol and diesel demand. And Brent crude oil has a major role to play here. At present, the price of crude oil per barrel stands at about $72, which keeps fluctuating every day. Fuel prices in India are revised daily based on the changing crude oil prices globally. As global crude oil prices go up, the import cost also increases. But that’s just one reason for the high retail prices. The remainder of the amount is just state and central government taxes. Fuel prices in India are one of the highest taxed in the world.
But what is affecting fuel prices right now and how are fuel prices calculated in India?
How Retail Price Of Petrol & Diesel Calculated?
Practically, Fuel rates are decided by oil companies as they aren’t bound on government regulation anymore. It’s the responsibility of the oil companies to adjust prices according to global rates. However, the state and central governments charge a hefty sum as taxes on the retail price of petrol and diesel, which we as an individual have to pay.
Petrol, Diesel Price in Delhi
The Delhi government on Wednesday announced a reduction in value-added tax (VAT) on petrol from 30 percent to 19.40 percent. The decision marked a price drop of Rs 8.56 per liter in petrol prices from Thursday in the national capital. This historical decision sighed relief. The fuel prices in Delhi have now become cheaper compared to other cities in the National Capital Region (NCR), Delhi Chief Minister Arvind Kejriwal said. However, diesel prices have been kept unchanged at Rs 86.67 in Delhi. Fuel prices in other states also remain unchanged.
As of June 1, 2021, the base price of petrol in Delhi stood at Rs. 36.04 per liter. The central government charges 35.35 percent as Excise Duty, followed by 23 percent charged by the Delhi state government. Add the dealer commission and value-added tax to this and you are paying about 60 percent as the tax on the retail price of one liter of petrol.
Data Source: HPCL
Petrol, Diesel Price in other metropolitan cities
City
Petrol
Diesel
Delhi
95.41
86.67
Mumbai
109.98
94.14
Chennai
101.40
91.43
Kolkata
104.67
89.79
Source: Indian Oil
Why Are Fuel Prices Different In Each State?
Fuel prices in India also attract higher Value-Added Tax in some states that further increase the price disparity. States like Madhya Pradesh and Rajasthan levy higher value-added tax at 33 percent and 36 percent respectively. Similarly, the fuel prices in Maharashtra include 26 percent VAT plus an additional tax of Rs. 10.12 per liter.
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Updated by Zeba Gouhar