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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.
To help you understand why the petrol prices change every day, here are the few factors that have a direct impact on its cost.
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.
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 Barrel||85.5 $ or Rs 6196 per Barrel|
|1 Barrel of Crude Oil||159 Litre||159 Litre|
|Crude Oil - Cost per Litre||Rs 38.97 per Litre||Rs 38.97 per Litre|
|Basic OMC Cost Calculation *|
|Entry Tax, Refinery Processing, OMC Margin, Freight Cost||Rs 3.82 per Litre||Rs 7.25 per Litre|
|Basic Cost of Fuel after Refining Cost||Rs 42.79 per Litre||Rs 46.22 per Litre|
|Additional: Excise Duty + Road Cess as Charged by Central Government|
|Pricing Charged to Dealers before VAT||Rs 19.48 / Litre on Petrol|
|Calculating Dealer Retail Price - Base Location Delhi|
|Commission to Petrol Pump Dealers||Rs 3.66 per Litre||Rs 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 Petrol||Rs 11.02 / Litre on Diesel|
|Final Retail Price as on 1st October 2018 -(calculation)||Rs 83.73 per Litre||Rs 75.09 per Litre|
The below table gives you the list of effective VAT imposed on petrol in different states in India as on September, 2018.
|Arunachal Pradesh||20.00%||Madhya Pradesh||35.78%|
|Bihar||24.71%||Maharashtra (Rest of State)||38.11%|
|Jammu & Kashmir||27.36%||Rajasthan||30.80%|
|Union Territories||Petrol||Union Territories||Petrol|
|Andaman & Nicobar Islands||6.00%||Daman & Diu||20.00%|
|Dadra & Nagar Haveli||20.00%||Puducherry||21.15%|
|SMS service||Send this SMS’ HPPRICE DEALER CODE ‘to 9222201122||Send this SMS ‘RSP DEALER CODE’ to 9223112222||Send this SMS ‘RSP DEALER CODE’ to 9224992249|
|Online Service||Visit 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.
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 Petrol||Rs 21.48 per Litre|
|VAT on Basic Price on Petrol||27% on Basic Price|
|Dealer's commission||Rs 3.23 per Litre|
|Excise Duty on Diesel||Rs 17.33 per Litre|
|VAT on Basic Price on Diesel||27% on Basic Price|
|Dealer's commission||Rs 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.
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.