Shubham Jaiswal (email@example.com)
Even as global crude oil prices have been hovering at multi-year lows, retail prices in India are unlikely to follow the same trend. In fact, the Centre, to shore up revenue, late on Tuesday raised excise duty by a record ₹10 per litre on petrol and ₹13 per litre on diesel, making the fuels more expensive for consumers.
Let’s look at how taxes make the fuels more expensive.
Taxes levied on fuel, such as excise duty, VAT, dealer commission, make retail prices nearly four times higher.
To put it in perspective, in Delhi, dealers pay ₹18.28/ litre for petrol which includes the base price and freight. After levying VAT, excise and dealer commission, the retail’s price shoots up to ₹71.26/litre- the rate in the national capital as on 6 May.
Similarly, for diesel, dealers pay ₹18.78 a litre, while retail prices are higher at ₹69.39 a litre as of today.
Excise duty – On petrol, the duty levied is ₹32.98 a litre, while on diesel it is ₹31.83 per litre.
VAT – Varies from state to state. Madhya Pradesh, Kerala, Rajasthan, Karnataka levied over 30% VAT – the highest among states.
Dealer commission – Is different for petrol and diesel and varies a little with the location of fuel pumps, ranging from ₹2-4/litre. In Delhi, the dealer commission is ₹3.57 a litre, while on diesel it is ₹2.51.