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Know how is Fuel Cost to Consumer Computed. Petrol and Diesel Prices Calculation Cost in 2021

Date: January 1, 2021


Know how Fuel Prices are Calculated in 2021 including Taxes Paid for each Litre of Petrol and Diesel Fuel

 

Fuel Price Calculation in 2021

Crude Oil Prices went to its Historic Lows by even going Negative in April 2021, but went steadily going up to almost 40$ per barrel

Calculating Crude Oil Cost - Petrol & Diesel - 2021

Below is Crude Oil Cost to Final Price of Petrol and Diesel

  1st January 2021
International Price of Brent Crude Oil with Ocean Freight (round off) 52 $ per Barrel
Currency Exchange Rate Rs 73.09 / USD
Crude Oil in Indian Currency Rs 3801
1 Barrel of Crude Oil 159 Litre
Crude Oil  - Cost per Litre Rs 23.9 per Litre
Petrol Price - Per Litre (Delhi) Rs 83.71 per Litre
Diesel per Litre (Delhi) Rs 73.87 per Litre

Wondering what happened in last 1 Year Months where despite Falling Crude Oil Prices you paying higher Fuel Prices 

 

Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - (as on 1st January 2021)

  Petrol Price Calculation* Diesel Price Calculation *
Basic OMC Cost Calculation    
Crude Oil including Ocean Freight Rs 23.9 per Litre Rs 23.9 per Litre
Refinery Processing + Refinery Margins + OMC Margin + Freight Cost, Logistics Rs 3.84 per Litre Rs 4.76 per Litre
Fuel Price after Processing (Ready to send to Petol Pump) Rs 27.74 per Litre Rs 28.66 per Litre
     
Central Government Taxes & Dealer Commission    
Additional: Excise Duty + Road Cess as Charged by Central Government
Rs 32.98 / Litre on Petrol Rs 31.83 / Lit on Diesel
Commission to Petrol Pump Dealers Rs 3.67 per Litre Rs 2.53 per Litre
     
Fuel Cost Before VAT    
Cost as on 1st January 2021 Rs 64.39 per Litre Rs 63.02 per Litre
     
VAT Calculation    
Additional:VAT (30% on Petrol and 16.75% on Diesel.  Additional Cess on Diesel) (1st January 2021) Rs 19.32 / Litre on Petrol Rs 10.85 / Litre on Diesel
     
Final Retail Price as on 1st January 2021 in Delhi Rs 83.71 per Litre Rs 73.87 per Litre

 

 

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 47.89 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 30 per Litre for Petrol and Diesel. Irony is - we are paying 150%+ Taxes than the Cost of Obtaining Petrol Fuel 

 

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 December 2017 Tax in January 2021
Excise  Duty on Petrol Rs 9.20 per Litre Rs 21.48 per Litre Rs 32.98 per Litre (incl. Road Cess)
Excise  Duty on Diesel Rs 3.46 per Litre Rs 17.33 per Litre Rs 31.83 per Litre (incl. Road Cess)
VAT on Basic Price on Petrol 20% on Basic Price 27% on Basic Price 30% VAT
VAT on Basic Price on Diesel 12.5% on Basic Price 16.75% on Diesel + 25p Cess 16.75% VAT + 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 (January 2021)

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 52.3 per Litre (63%) Rs 83.71 per Litre
Diesel in Delhi Rs 42.68 per Litre (58%) Rs 73.87 per Litre

Basis - 1st January 2021 Prices in Delhi

It means for Every Litre of Petrol you are filling -- you are paying a steep tax of almost Rs 52 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 December 2021 records a high of over Rs 89 per Litre. The Excise+VAT+Surcharge in Mumbai is almost the highest making Maharashtra with Highest Fuel Prices in India


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 1st January 2021

  Petrol Price / Litre^ Diesel Price / Litre^
New Delhi Rs 83.71 Rs 73.87
Mumbai Rs 90.34 Rs 80.51
Chennai Rs 86.51 Rs 79.21
Kolkata Rs 85.91 Rs 77.44

^ - Prices as on 1st January 2021

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, thats why Petrol selling at such low rates in Goa.

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


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