Previously, everybody felt the pinch when rates would go up by Rs 2 or 3 per litre in one go. Now they are being increased by 1 paisa to 15 paise a litre everyday, hikes that have largely gone unnoticed. Ever since the oil marketing companies started the daily revision, prices of petrol and diesel have only been going up. And surprisingly, there are no protests from any political parties. The simple reason is that the rise is gradual and it goes unnoticed.
There has been calls for a reduction in taxes while the government is not yet committing such a step. Petrol and diesel do not come under GST, due to which the prices vary across states.
|Break-up of petrol and diesel prices at Delhi effective from 15 Sep 2017|
|Cost & freight price on moving average basis of crude oil||$/barrel||67.95|
|Average exchange rate||Rs/$||64.01|
|Trade parity landed cost based on daily pricing methodology||Rs/Litre||27.61|
|Marketing cost, margin, freight & other charges||Rs/Litre||2.80|
|Price charged to dealers (Excluding excise & VAT)||Rs/Litre||30.41|
|Add: Excise duty||Rs/Litre||21.48|
|Add: Dealer commission (average)||Rs/Litre||3.57|
|Add: VAT* applicable for Delhi @27%||Rs/Litre||14.97|
|Retail selling price at Delhi||Rs/Litre||70.43|
|Cost & freight price on moving average basis of crude oil||$/barrel||67.41|
|Average exchange rate||Rs/$||64.01|
|Trade parity landed cost based on daily pricing methodology||Rs/Litre||27.51|
|Marketing cost, margin, freight & other charges||Rs/Litre||2.78|
|Price charged to dealers (Excluding excise & VAT)||Rs/Litre||30.29|
|Add: Excise duty||Rs/Litre||17.33|
|Add: Dealer commission (average)||Rs/Litre||2.50|
|Add: VAT* applicable for Delhi @16.75% + Rs 0.25/Ltr pollution cess||Rs/Litre||8.69|
|Retail selling price at Delhi||Rs/Litre||58.80|
|*including VAT on dealer commission; Source: Indian Oil Corp|
As per the data available on Indian Oil Corporation’s website,
The cost of petrol is at Rs 34 in Delhi.
Total taxes of Rs 36.5,
Taking fuel price for the consumer to Rs 70.43 per litre in Delhi (as on 15 September). This means the taxes on the product is more than its cost.
Similarly, the cost of diesel is Rs 32.80, while the total tax incidence is Rs 26.02 per litre.
Petrol Price Trend :
On Tuesday, petrol price in Mumbai stood at Rs 79.48 per litre – a three-year high. Daily revision was introduced on 16 June this year. The highest that petrol price hit was Rs 81.75 per litre in Mumbai on 1 August 2014 and lowest was Rs 62.75 on 1 March 2016.
Diesel Price Trend :
On Tuesday, diesel price in Kolkata was at 3-year high of Rs 61.38 per litre. The highest the diesel price (in Mumbai) hit was Rs 67.26 on 31 August 2014 and the lowest Rs 49.51 on 1 September 2015.
While introducing the daily price revision, the government had said that the move is in keeping with the international practice. So, how do our petrol and diesel prices compare with our neighbouring countries? They are much higher.
For instance, 1 September 2017, petrol in Delhi cost Rs 69.26 per litre whereas in
- Pakistan it cost just Rs 40.82 per litre
- Sri Lanka Rs 49.80 per litre and
- Nepal Rs 61.88 per litre.
- In Bangladesh, it was at par with India at Rs 69.16 per litre.
In case of diesel, the price in Delhi was Rs 57.13 per litre,
- Sri Lanka Rs 40.43 per litre
- Nepal Rs 46.72
- Pakistan Rs 47.15 and
- Bangladesh Rs 52.27.
One of the main reason why the consumers do not get the benefit is due to several taxes levied by the government.
- The central excise duty on petrol shot up 127 percent from Rs 9.48 per litre in June 2014 to Rs 21.33 in January 2016.
- In case of diesel, the rise is a much sharper 387 percent during the period.
- In June 2014, the excise on the fuel stood at Rs 3.56 per litre and in January 2016, it was at Rs 17.33.
- There are other state levies too that add up in the fuel bill. Following two charts show top 10 states/Union Territories that charge higher sales tax/VAT on petrol and diesel.