Know how is Fuel Cost to Consumer Computed. Petrol and Diesel Prices Calculation Cost in 2019

Date: January 3, 2019


Fuel Prices have reduced by more than 15% in both Petrol and Diesel of Recent Times. Know how Fuel Prices are Calculated in 2018

Last updated on 3rd January 2019

 

Fuel Price Calculation in 2019

Petrol and Diesel Prices have steeply reduced been the Crude Oil Prices fallen from 84 $ / Barrel to 55 $ / Barrel

Its important to note that that Fuel Prices in India are excluded from GST Framework by the Government of India, and also Rs 2 per Litre Excise Duty around 3 months back when Fuel Prices were on fire

 

Calculating Crude Oil Cost - Petrol & Diesel - 2019

If you reading Internationally, the price of crude Oil hovers at around 55 Dollar per Barrel 

On Importing Oil - Barrel Cost + 1.5$ Ocean Freight of needs to be paid - effectively implying - 56.5 $ per barrel as import cost. This is Equivalent to Rs 3967 in INR (keeping exchange rate at Rs. 70.22 / USD )

» 1 barrel of crude Oil is Equivalent to around 159 Litres of Crude Oil

» Raw Crude Oil in Indian Currency: Rs. 3967 / 159 = Rs 24.95 per Litre approx

Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - (3rd January 2019)

  Petrol Price * Diesel Price Calculation *
International Price of Crude Oil with Ocean Freight (as on 3rd January 2019) 56.5 $ or Rs 3967 per Barrel 56.5 $ or Rs 3967 per Barrel
1 Barrel of Crude Oil 159 Litre 159 Litre
Crude Oil  - Cost per Litre Rs 24.95 per Litre Rs 24.95 per Litre
     
Basic OMC Cost Calculation *    
Entry Tax, Refinery Processing, OMC Margin, Freight Cost, Logistics Rs 7.16 per Litre Rs 11.74 per Litre
Basic Cost of Fuel after Refining Cost Rs 32.11 per Litre  Rs 36.69 per Litre 
     
Additional: Excise Duty + Road Cess as Charged by Central Government
Rs 17.98 / Litre on Petrol Rs 13.83 / Lit on Diesel
Pricing Charged to Dealers before VAT Rs 50.49 per Litre Rs 50.89 per Litre
     
Calculating Dealer Retail Price - Base Location Delhi    
Commission to Petrol Pump Dealers Rs 3.57 per Litre Rs 2.53 per Litre
Fuel Cost Before VAT (rounded off for approximation) Rs 54.06 per Litre Rs 53.42 per Litre
     
Additional:VAT (Varies from State to State - 27% on Petrol & 16.75% on Diesel + 25p as Pollution Cess with Surcharge) Rs 14.59 / Lit on Petrol Rs 9.24 / Litre on Diesel
Final Retail Price as on 3rd January 2019  -(calculation) Rs 68.65 per Litre Rs 62.66 per Litre

* - Prices as on 3rd January 2019, approx cost for Basic OMC Cost calculation

 

Very Important: The Petrol been Sold in India from End 2017 has 10% of Ethanol been Mixed with Petrol. Been Ethanol is a natural Fuel (as made from Sugar and starch) and very well can be mixed with Petrol without any changes and also has no PM (Particulate Material) Pollution.

However - the catch is Ethanol is priced at just Rs 40.85 per Litre, but is mixed in Petrol and the given rate is combined rate as been sold to consumer

It means that if your car go for petrol Tank Full of say 30 Litres - then in actual your car will get 27 Litre Petrol and 3 Litre Ethanol - but the rate charged would be the price of Petrol only - means you have to pay price of 30 Litre Petrol.

Also - there is slight a caution to Car Owners that they should ensure that Water does not come in contact with Petrol by any chance during Car Wash or Fuel Refill. If you going for Fuel refill during Monsoon and a small contact of water will lead Ethanol to break as separate layer against Petrol and this will end up giving Jerks making the car difficult to even start with.

 

Had it been ideal world - we would have ended up with Fuel Cost of Rs 40 per Litre for Petrol and Diesel. Irony is - we are paying more Taxes than the Cost of Obtaining Petrol Fuel in some states

 

Taxation Scenario on Petrol and Diesel Fuel

Do you always Wondered that Despite of Falling International Crude Oil Costs, Petrol and Diesel Prices in India are on higher Side

Apart from Crude Oil Rates - There are 2 Important Factors which determine the Fuel Cost - VAT and Excise Duty - which is as below

  Tax in November 2014 Tax in August 2017 Tax in January 2019
Excise  Duty on Petrol Rs 9.20 per Litre Rs 21.48 per Litre Rs 17.98 per Litre 
Excise  Duty on Diesel Rs 3.46 per Litre Rs 17.33 per Litre Rs 13.83 per Litre
VAT on Basic Price on Petrol 20% on Basic Price 27% on Basic Price 27% on Basic Price
VAT on Basic Price on Diesel 12.5% on Basic Price 16.75% on Diesel + 25p Cess 16.75% on Diesel + 25p Cess

Disclaimer :- Excise including Road Cess, Fuel Price Calculation done in Delhi, VAT rates in Delhi. Excise rates Standard Pan India

 

Taxes Paid for Obtaining Fuel 

Below are Taxes Paid for Obtaining Fuel in Delhi (Scenario is not much different in other cities too - almost similar or even higher taxes charged)

  Tax Paid for Obtaining Fuel Total Cost of Fuel
Petrol in Delhi Rs 32.57 per Litre (47%) Rs 68.65 per Litre
Diesel in Delhi Rs 23.07 per Litre (37%) Rs 62.66 per Litre

Basis - 3rd January 2019 Prices in Delhi

It means for Every Litre of Petrol you are filling -- you are paying a steep tax of Rs 32.57 per Litre in Delhi to State and Central Government. Its even higher in Other cities

If you are Staying in Mumbai - you are paying highest Taxes on Petrol Prices in India. Reason Mumbai has highest State Level Taxes (VAT with additional Surcharge) and petrol prices in January are Rs 74.34 per Litre (almost 20% higher than Goa). The Excise+VAT+Surcharge in Mumbai is almost the highest


Know More -

» Why Petrol and Diesel Prices are High in India - Reasons for High Petrol and diesel Price in India

» Taxes on Buying Cars - Know Taxes Paid as Ownership Cost of Car

» Petrol or Diesel Cars - Guide on Which Car should you Buy

» Hatchback Cars with Best Mileage 

» Sedan Cars with Best Mileage 

» SUV Cars with Best Mileage 


  

Fuel Prices in India - based on Prices on 3rd January 2019

  Petrol Price / Litre^ Diesel Price / Litre^
New Delhi Rs 68.65 Rs 62.66
Mumbai Rs 74.34 Rs 65.61
Chennai Rs 71.27 Rs 66.19
Kolkata Rs 70.83 Rs 64,47
Goa Rs 61.33 Rs 61.83
Andaman & Nicobar Island Rs 59.46 Rs 58.95

^ - Prices as on 3rd January 2019

Wondering for Fuel Price Difference. One of the Major Reasons for Discrepancy in Fuel Prices across States is that no GST Framework on Petroleum Prices and still VAT at differential rates been charged along with additional surcharge in some states

» VAT Rate Difference - VAT rate varies from state to state and to give instance on Petrol is highest in Maharashtra, Punjab, Telangana, Kerala, TamilNadu while some states like Goa have lowest VAT on Petrol. Infact, Petrol Prices in Goa are lower than Diesel Prices.

All this leads to different Prices of Petroleum Products in Various States and Union Territories in India


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