Petrol, Diesel Prices Hiked 7 times this Month: Know How Much Tax You Pay on Fuel

Domestic fuel prices have hiked seven time this month. Currently, petrol and diesel prices are at all-time high in Delhi and Mumbai. In Delhi, petrol costs Rs 92.05 a litre while diesel is being sold at Rs 82.61. Petrol has become costlier by Rs 1.65 and diesel by Rs 1.88 in the national capital in less than two weeks.

The price of auto fuel in India depends on international crude oil prices, rupee-dollar exchange rate. Moreover, the central government and states levy various taxes — excise duty and Value Added Tax (VAT) on petrol and diesel. Dealer’s commission and freight charges are also added in the fuel price. It must be noted that petrol and diesel do not come under the purview of goods and services tax (GST).

How much tax you pay on a litre of petrol and diesel in Delhi

Petrol:

Let’s consider the petrol price of Rs 90.40 a litre on May 1 in Delhi. The base price of the petrol is Rs 32.61, according to state-run oil marketing company Indian Oil. The freight levy is fixed at ₹0.28. The dealers pay Rs 32.89 of petrol in the capital. This price does not include excise duty or VAT. The excise duty levied on petrol is Rs 32.89. The dealer commission is ₹3.75 per litre in Delhi. On this, a further VAT of Rs 20.86 is being added. VAT accounts for about 22% in Delhi. Then comes the final retail selling price of petrol of 90.40 a litre in Delhi. (On May 1).

Diesel: 

The retail price of diesel was Rs 80.73 a litre in the capital on May 1. The base price is fixed at Rs 34.27, according to Indian Oil website. With a freight levy of Rs 0.25, the price charged to dealer comes at Rs 34.52. Then, add an excise duty of Rs 31.80 on it. The dealer’s commission on diesel is Rs 2.58 in Delhi. A further VAT of Rs 11.83 is being added to it.

The Centre raised excise duty by Rs 13 on petrol and Rs 16 on diesel between March 2020 and May 2020.  The duty now stands at ₹31.8 on diesel and ₹32.9 on petrol. VAT varies from state to state. Madhya Pradesh, Rajasthan levy over 30% VAT — the highest among states. The dealer’s charge is different for petrol and diesel. The commission also varies with the location of fuel pumps, ranging from Rs 2-4 per litre.

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