Crude oil prices have come down significantly in the global market. At this time, the price of Indian basket crude has come close to $ 35 per barrel, but the prices of petrol and diesel are not decreasing in the country. Tax is a big reason behind this. The taxes the central and state governments impose are much higher than the actual price of petrol and diesel.
Highlights
Highlights
- You do not get the benefit of the fall in the price of crude oil because more than half of the share of tax in the price
- When you buy petrol at the rate of about 76.73 litres, you do not pay all the money to petrol companies.
- While the actual price of petrol is Rs 22.11 per litre, the price of diesel is Rs 22.93 per litre.
- In the international market, the price of Indian basket crude is around $ 35, while the price of diesel-petrol is at a 19-month high.
The impact of coronaviruses on the world economy is causing crude oil prices to fall again. The price of Indian basket crude has come close to $ 35 per barrel. Even then, where you are getting petrol in the domestic market at a price of Rs 76.73 per litre, then diesel 75.19 per litre. This is the highest level in 19 months. Earlier on 18 November 2018, the price of petrol was Rs 76.71 while on 17 November 2018, the price of diesel was Rs 75.16.
Now the question arises that when the price of crude oil has decreased in the worldwide market. why are we getting petrol and diesel so expensive?
85% Crude Oil Comes From Outside
The demand for petroleum products in India may have increased rapidly, but production is not enough. In such a situation, we have to import about 85 percent of our crude oil. Obviously, if it was expensive in the foreign market, then petrol and diesel would be expensive in the domestic market and crude oil would be cheaper and petroleum product would be cheaper. But it does not look like this right now. Let us explain what is included in the price of one litre of petrol.
Government's Big Hand in Oil Game
The last time the prices of crude oil were falling sharply between 2014 and 2016, the government continued to increase its income in the form of excise duty instead of giving the benefit to the common people. Between November 2014 and January 2016, the central government increased excise duty 9 times and granted relief only once. By doing this, between 2014-15 and 2018-19, the central government earned Rs 10 lakh crore through tax on oil. At the same time, state governments also did not miss washing hands in this flowing Ganges. VAT on petrol and diesel made them rich. In the year 2014-15, where VAT received Rs 1.3 lakh crore, it increased to Rs 1.8 lakh crore in 2017-18. This time when the prices started to decrease due to coronavirus, the central government increased the tax on it. The state governments also followed this path and they also increased VAT.
Tax of Rs. 50 on Petrol of Rs. 22/ litres
When you buy petrol at more than Rs 76 a litre, you do not pay all the money to petrol companies. More than half of this money goes to the Centre and the state in the form of tax. According to information received from Indian Oil, the country's largest oil marketing company, at present, the price of one litre petrol in Delhi is ex-factory price or base price of Rs 22.11. This includes Rs 32.98 as central government excise duty, 33 paisa on freight, dealer commission of 3.60 paisa and state government VAT of Rs 17.71. The state government also levies VAT dealer commission. Overall, the price of petrol becomes Rs 76.73.
Price of one Litre petrol including tax in Delhi on 16 June 2020
| Ex Factory Price | ₹ 22.11 |
| Freight and Other Expenses | ₹ 0.33 |
| Excise Duty | ₹ 32.98 |
| Dealer's Commission | ₹ 3.60 |
| VAT (with Dealer's Commission) | ₹ 17.71 |
| Price for You | ₹ 76.73 |
No Less Tax on Diesel Too
The government is also not behind in collecting tax on diesel. The ex-factory price or base price of one litre diesel in Delhi is Rs 22.93. It costs 30 paisa per litre. The excise duty of the central government is Rs 31.83, the dealer commission is Rs 2.53 and the state government's VAT is Rs 17.60. In this way its price becomes Rs 75.19.
Price of one Litre Diesel including Tax in Delhi on 16 June 2020
| Ex Factory Price | ₹ 22.93 |
| Freight and Other Expenses | ₹ 0.30 |
| Excise Duty | ₹ 31.83 |
| Dealer's Commission | ₹ 2.53 |
| VAT (with Dealer's Commission) | ₹ 17.60 |
| Price for You | ₹ 75.19 |
(Source: IOC)
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