Petrol price is highly Dynamic, it changes every day due to international crude oil price, the demand of consumers, petroleum production, international political interference, etc. The price of petrol and diesel varies from place to place in India due to the addition of transportation cost, dealers commission, state taxes, pipeline cost, etc.
There are various companies in the retail market namely Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited( BPCL), Essar Oil, Reliance Industries Limited, Oil and Natural Gas Corporation Limited (ONGC).
Each company has semi-autonomy in controlling price. HPCL, BPCL, IOCL control 90% of the market. The petrol and diesel have the same cost ( as both of them are from petroleum) but there is a difference due to variation of refining costs, taxes, and dealer commission on them. Now let’s start step by step.
As of Today, one dollar is 72.54 Indian Rupee and one barrel is 159 liters. The current Crude Oil Price is around $61.14 per barrel which means 27.9 Rupees per liter. Now excluding excise duty and VAT, the price charged to dealers is 28.27 Rupees per liter. Now let’s start the death game of taxes.
VAT or Value Added Tax is 27% of all the calculations done above. This whole together gives you the price you pay for a petrol pump. Not So Fun Fact: India has the highest taxes on fuel in the World which is 69%
Do share with us, cost of petrol in your area in the comment section and Don’t Worry Guys, things will get cheaper or chances are you will get many things for free, you only have to wait for the election