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Petrol Price in India

In today’s time, people love travelling by road as vehicles are now easily available and the roads too have become safe to travel. This has made petrol an essential commodity as it is important for the purpose of transportation. However, due to increase in the demand for petrol and various other factors, petrol prices have witnessed a heavy rise. The constant increase in petrol price has put an additional pressure on the consumer, thus leaving him with no choice but to pay the petrol price prevailing on that day. It is important for an individual to check the petrol price today to understand the 1 litre price and purchase it accordingly. Recently, few states in India have witnessed a heavy rise in petrol price due to a number of factors that have had a direct impact on its price.

Factors Affecting Petrol Price in India

To help you understand why the petrol prices change every day, here are the few factors that have a direct impact on its cost.

  • Crude oil cost: This is one of the most important factors that has a direct impact on the petrol price in the Indian domestic market. Known as unrefined oil, crude oil is an international commodity and any change in its cost impacts the Indian fuel price. The cost of the crude oil is mainly increased due its demand and supply, international political relations and future supplies and reserves.
  • Rise in demand: With an increase in the number of people owning private vehicles, the demand for the fuel has increased, contributing towards the petrol price hike. Supply and demand ratio: Petrol is produced by processing crude oil, the cost of which affects the fuel price in India. Oil refinery companies in India face problem to meet the rising demand of petrol as the cost of crude oil is rising, thus resulting in less supply of petrol.
  • Taxes: Petrol prices in India change in accordance with the changes in government policies that impose tax on fuels. To get marginal returns and recover the losses, Indian oil companies change their rate depending on the changing rate of taxes.
  • Rupee and dollar: This is one of the very important factors having a huge impact on petrol price in India. Oil imported in India is traded in dollars. So, when the dollar strengthens against the Indian rupee, the buying cost goes high, thus impacting the cost of petrol.
  • Refinery consumption ratio : The imported crude oil is sent to refineries for further processing. A low refinery ratio leads to lower quantity of petrol available for sale, thus increasing the cost of petrol.

How is Petrol Price in India calculated?

Price of petrol in India is rapidly increasing, which makes it necessary for an individual to understand how the price is calculated.

Petrol is one commodity in India that has been kept out of the purview of the Goods and Service Tax (GST). The retail selling price of petrol in India is based on a crude oil, OMC margin, transportation cost, freight costs, central government taxes, state government taxes, excise duty and other taxes.

  • Crude oil: India is one of the biggest importers of crude oil and one of the biggest components of the retail selling price of petrol. Since crude oil is required for processing petrol, oil manufacturing companies in India pay overseas crude oil companies addition charges along with the freight and insurance charges to obtain the oil. For example: If one barrel of crude oil (equivalent to 159 litres) costs Rs. 4200, then per litre crude oil costs Rs. 26.42
  • OMC Costs: Oil marketing companies refine crude oil into petrol and then sell it to the dealers. These companies sell petrol to dealers adding their own profit margin, which includes transportation cost, operational costs, refinery processing cost and others.
  • VAT : The value added tax on petrol varies from state to state which is why the petrol prices differ across different states and cities.
  • Central and state taxes: The excise duty on petrol is the same across all the nations. Currently the excise duty levied on petrol by the Indian Government is Rs.21.48 a litre.

Here’s an example of how the retail selling price of petrol is determined in Delhi.

Petrol Price *Diesel Price Calculation *
International Price of Crude Oil with Ocean Freight (as on 1st October 2018)85.5 $ or Rs 6196 per Barrel85.5 $ or Rs 6196 per Barrel
1 Barrel of Crude Oil 159 Litre159 Litre
Crude Oil - Cost per LitreRs 38.97 per Litre Rs 38.97 per Litre
Basic OMC Cost Calculation *
Entry Tax, Refinery Processing, OMC Margin, Freight CostRs 3.82 per LitreRs 7.25 per Litre
Basic Cost of Fuel after Refining CostRs 42.79 per Litre Rs 46.22 per Litre
Additional: Excise Duty + Road Cess as Charged by Central Government
Pricing Charged to Dealers before VATRs 19.48 / Litre on Petrol
Calculating Dealer Retail Price - Base Location Delhi
Commission to Petrol Pump DealersRs 3.66 per LitreRs 2.52 per Litre
Fuel Cost Before VAT (rounded off for approximation)Rs 65.93 per Litre Rs 64.07 per Litre
Additional:VAT (Varies from State to State - 27% on Petrol & 16.75% on Diesel + 25p as Pollution Cess with Surcharge)Rs 17.8 / Lit on PetrolRs 11.02 / Litre on Diesel
Final Retail Price as on 1st October 2018 -(calculation)Rs 83.73 per LitreRs 75.09 per Litre

VAT on Petrol Prices in India

The below table gives you the list of effective VAT imposed on petrol in different states in India as on September, 2018.

StatesPetrolStatesPetrol
Andhra Pradesh35.77%Kerala30.37%
Arunachal Pradesh20.00%Madhya Pradesh35.78%
Assam30.90%Maharashtra24.78%
Bihar24.71%Maharashtra (Rest of State)38.11%
Chattisgarh26.87%Manipur23.67%
Delhi27.00%Meghalaya22.44%
Goa16.66%Odisha24.62%
Gujarat25.45%Mizoram18.88%
Haryana26.25%Nagaland23.21%
Himachal Pradesh24.43%Punjab35.12%
Jammu & Kashmir27.36%Rajasthan30.80%
Jharkhand25.72%Sikkim15.71%
Karnataka30.28%Tamil Nadu24.08%
Tripura23.15%Telangana26.01%
Uttarakhand27.15%Uttar Pradesh16.84%
West Bengal25.25%
Union TerritoriesPetrolUnion TerritoriesPetrol
Andaman & Nicobar Islands6.00%Daman & Diu20.00%
Chandigarh19.76%Lakshadweep
Dadra & Nagar Haveli20.00%Puducherry21.15%

How to Check Petrol Prices in India?

OptionsHPBPCLIndian Oil
SMS serviceSend this SMS’ HPPRICE DEALER CODE ‘to 9222201122Send this SMS ‘RSP DEALER CODE’ to 9223112222Send this SMS ‘RSP DEALER CODE’ to 9224992249
Online ServiceVisit Hindustan Petroleum website-www.hindustanpetroleum.com and select “Pump Locator”Visit Bharat Petroleum website- www.bharatpetroleum.in and select “Pump Locator”Visit the official website of Indian Oil- www.iocl.com and select “Pump Locator”

Renowned petrol companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum have made it easy for Indians to check petrol prices in an easy way by doing the following.

Impact of GST on Petrol Prices in India

GST is the Goods and Service Tax Act that came into effect in the country in July 2017. Petrol, and its related products, is a commodity that has been kept out of the GST regime. Currently, petroleum products such as crude oil, natural gas, LPG, diesel and petrol are not under the ambit of GST and are subject to central excise duty and state specific VAT. The addition of these taxes seems to exceed the cost of petrol and diesel in the country. The levy of central and excise duty increases the cost of petrol.

The below chart explains the tax structure levied on petrol in India

Excise Duty on PetrolRs 21.48 per Litre
VAT on Basic Price on Petrol27% on Basic Price
Dealer's commissionRs 3.23 per Litre
Excise Duty on DieselRs 17.33 per Litre
VAT on Basic Price on Diesel27% on Basic Price
Dealer's commissionRs 2.17 per Litre

Let’s consider the below example to understand what happens if petrol comes under the ambit of GST.

As on September 2018 in Delhi, an individual has to pay Rs 70.52 to purchase a litre of petrol. If you minus the excise duty (Rs. 21.48) charged on per litre of petrol by the centre, also the 27% VAT charged by the state government (calculated to be Rs 14.96), dealers commission (Rs 3.24), the actual cost of petrol comes to Rs. 30.85 per litre. For example, as of September 2018 in Delhi, an individual has to pay Rs. 70.52 for purchasing 1 litre of petrol. If the excise duty i.e. Rs. 21.48 per litre is taken out and 27% VAT i.e. Rs. 14.96 on price of the petrol, dealer’s commission i.e. Rs.3. 24 is waived off, then the actual cost of petrol comes around to be Rs. 30.85 per litre.

So what happens if petrol comes under GST ambit?

If we assume that the Indian Government brings petrol prices under 12 % GST bracket, then petrol price could come down to Rs 38.1 in Delhi At 18 % GST bracket, petrol price will be Rs. 40.05 per litre And at 28% GST bracket, petrol will cost Rs. 43.44 a litre in Delhi.

Note: The above calculations are assumptions based on current petrol price in Delhi i.e. Rs. 70-71 per litre in September, 2018.

FAQs on Petrol Price in India

What is a petrol pump?

A petrol pump is a petrol and other fuel dispensing and selling station

Is the price of petrol same at all petrol pumps in India?

No, the price of petrol at all petrol pumps is not similar in India and it is largely affected by USD, international political conditions, costs of the petrol refineries, applicable government taxes, etc.

Does petrol rate in India change on an everyday basis?

Yes, the petrol price in India changes on an everyday basis at 6:00 AM.

What is the petrol price in Delhi?

You can check the petrol price in Delhi online or at the nearest petrol pump.

Why is petrol price different in all the states of India?

Petrol price is different in all the states of India due to tax regulations prevailing in the state, transportation costs and international political factors.

Which are the well-known oil marketing companies in India?

Well-known oil marketing companies in India are Reliance Industries, Essar, Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Private Corporate.

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