Record production in the United States (US), weakened demand from the
Eurozone and emerging economies like China and Brazil, and Iran’s entry
into the international market have effectively slashed the price of crude oil for India, from $106 per barrel in July 2014 to $26 in January 2016—a 75% drop over 15 months.
As global crude prices reach a 11-year low, the Centre and state governments steadily increase excise duties and value-added tax, shoring up their revenues and keeping fuel prices high for retail consumers.
Although India imports more than 80% of its fuel requirement, which means declining global prices should, theoretically, have seen sharp declines in retail petrol and diesel prices, Indian consumers of petrol and diesel now pay about double the global rate.
Indian prices stay high because oil marketing companies (OMCs), such as Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd and Reliance Industries Ltd., add their margins, the central government adds excise, state governments add their own (value-added) taxes, and the dealers (petrol pumps) get their commission.
The total of these is the Retail Price of the fuel you pay.
Of the price you pay for a litre of petrol, 57% goes to the government as tax. Of the Rs 44 per litre of diesel, 55% is tax.
Excise hiked five times in three months; diesel duty hiked 140%
You pay more taxes on diesel and petrol than price of fuels
The addition of central taxes on diesel is higher than those on petrol. Central taxes per litre of diesel rose to four times its value in April 2014—from Rs 4.52 per litre to Rs 17.33 per litre in February 2016.
As global crude prices reach a 11-year low, the Centre and state governments steadily increase excise duties and value-added tax, shoring up their revenues and keeping fuel prices high for retail consumers.
Although India imports more than 80% of its fuel requirement, which means declining global prices should, theoretically, have seen sharp declines in retail petrol and diesel prices, Indian consumers of petrol and diesel now pay about double the global rate.
Indian prices stay high because oil marketing companies (OMCs), such as Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd and Reliance Industries Ltd., add their margins, the central government adds excise, state governments add their own (value-added) taxes, and the dealers (petrol pumps) get their commission.
The total of these is the Retail Price of the fuel you pay.
Of the price you pay for a litre of petrol, 57% goes to the government as tax. Of the Rs 44 per litre of diesel, 55% is tax.
Excise hiked five times in three months; diesel duty hiked 140%
06/11/15
16/12/15
01/01/16
15/01/16
30/01/16
You pay more taxes on diesel and petrol than price of fuels
The addition of central taxes on diesel is higher than those on petrol. Central taxes per litre of diesel rose to four times its value in April 2014—from Rs 4.52 per litre to Rs 17.33 per litre in February 2016.
Components Of Retail Diesel Price, 2014 To 2016
Price Charged By OMCs To Dealers
Central + State Taxes
Final Price To Consumer
Final Price To Consumer
February 2016
20
40
April 2014
July 2014
October 2014
January 2015
April 2015
July 2015
October 2015
December 2015
February 2016
What India Pays, What Indians Pay, 2004 to 2016
Oil Price
Petrol Price
Diesel Price
Diesel Price
2016
50
100
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
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