Petrol Price: Most people are surprised to know how much of what they pay at the petrol pumps is not the fuel price itself. Today, we explain why a litre of diesel or petrol costs almost double its original price, so you know where your money is going.
How ₹52 Petrol Turns Into ₹94 at the Pump
A litre of petrol costs ₹94.77 in Delhi but its actual cost — base price — is only ₹52.83. What fills the additional ₹41.94? There are a few components on top of this base price. First, there is ₹0.24 a litre as transportation cost. Next is the central government’s excise duty, adding ₹21.90 a litre.
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Petrol retailers also get a commission of ₹4.40 per litre sold by them. Finally, there is a VAT (Value Added Tax) of ₹15.40 per litre imposed by the Delhi government. All this converts ₹52 petrol into ₹94.77 at the pump.
Diesel Price Calculation: What You Actually Pay For
For diesel, the situation is no different. A litre of diesel in Delhi costs you ₹87.67, whereas the real base price is just ₹53.75. Here’s how it breaks down: ₹0.26 as transportation cost is levied. Excise duty on diesel is ₹17.80, dealer commission is ₹3.03, and VAT levied by the Delhi government is ₹12.83 per litre. Once all of these surcharges are imposed, the amount you end up paying is ₹87.67 per litre.
What Is Covered in Petrol and Diesel Prices?
Both fuels contain identical ingredients added to their final price. These are the base price (which approximates the international crude price), freight or transportation cost, central excise duty, dealer commission, and VAT of respective states. All these contribute significantly to raising the final price.
Why Prices Differ State by State
One of the key reasons that fuel prices are different in different parts of India is VAT, which varies from state to state. Though base prices and excise duties remain constant, states decide their own VAT percentage. That’s why you can see different cheaper or more expensive fuel prices when you move to various states.
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