Know how is Fuel Cost to Consumer Computed. Petrol and Diesel Prices Calculation Cost in 2019
Date: July 6, 2019
Know how Fuel Prices are Calculated in 2019 including Taxes Paid for 1 Litre of Petrol and Diesel Fuel
Last updated on 6th July 2019
Fuel Price Calculation in 2019 : Post Budget Impact
Petrol and Diesel Prices were pretty much hovering in steady zone in 2019, unless the Budget came in which imposed in additional Rs
» Rs 1 Per Litre as additional Excise Duty
» Rs 1 per Litre as additional Road & Infra Cess
Interested in knowing that despite Crude Oil at just 57.72$ per Barrel (as on 6th July 2019) means at just Rs 3950 for 159 Litre (effectively at less than Rs 25 per Litre) - why you paying such high price of Fuel
Its important to note that that Fuel Prices in India are excluded from GST Framework by the Government of India and are still on Excise Duty Framework as earlier was charged
Calculating Crude Oil Cost - Petrol & Diesel - 2019
If you reading Internationally, the price of crude Oil hovers at around 57.72 Dollar per Barrel
On Importing Oil - Barrel Cost + 1$ Ocean Freight of needs to be paid - effectively implying - 58.72 $ per barrel as import cost. This is Equivalent to Rs 4019 in INR (keeping exchange rate at Rs. 68.45 / USD )
» 1 barrel of crude Oil is Equivalent to around 159 Litres of Crude Oil
» Raw Crude Oil in Indian Currency: Rs. 4019 / 159 = Rs 25.27 per Litre approx
Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - (6th July 2019 after Budget 2019)
| Petrol Price * | Diesel Price Calculation * | |
| International Price of Crude Oil with Ocean Freight (as on 6th July 2019) | 58.72 $ or Rs 4019 per Barrel | 58.72 $ or Rs 4019 per Barrel |
| 1 Barrel of Crude Oil | 159 Litre | 159 Litre |
| Crude Oil - Cost per Litre | Rs 25.27 per Litre | Rs 25.27 per Litre |
| Basic OMC Cost Calculation * | ||
| Entry Tax, Refinery Processing, OMC Margin, Freight Cost, Logistics | Rs 8.64 per Litre | Rs 13.27 per Litre |
| Basic Cost of Fuel after Refining Cost | Rs 33.91 per Litre | Rs 38.54 per Litre |
| Additional: Excise Duty + Road Cess as Charged by Central Government |
Rs 19.98 / Litre on Petrol | Rs 15.83 / Lit on Diesel |
| Pricing Charged to Dealers before VAT | Rs 53.89 per Litre | Rs 54.37 per Litre |
| Calculating Dealer Retail Price - Base Location Delhi | ||
| Commission to Petrol Pump Dealers | Rs 3.56 per Litre | Rs 2.5 per Litre |
| Fuel Cost Before VAT (rounded off for approximation) | Rs 57.45 per Litre | Rs 56.87 per Litre |
| Additional:VAT (Varies from State to State - 27% on Petrol & 16.75% on Diesel + 25p as Pollution Cess with Surcharge) | Rs 15.51 / Lit on Petrol | Rs 9.82 / Litre on Diesel |
| Final Retail Price as on 6th July 2019 -(calculation) | Rs 72.96 per Litre | Rs 66.69 per Litre |
* - Prices as on 6th July 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 July 2019 | |
| Excise Duty on Petrol | Rs 9.20 per Litre | Rs 21.48 per Litre | Rs 19.98 per Litre (incl. Road Cess) |
| Excise Duty on Diesel | Rs 3.46 per Litre | Rs 17.33 per Litre | Rs 15.83 per Litre (incl. Road Cess) |
| 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 35.49 per Litre (48%+) | Rs 72.96 per Litre |
| Diesel in Delhi | Rs 25.65 per Litre (38%+) | Rs 66.69 per Litre |
Basis - 6th July 2019 Prices in Delhi
It means for Every Litre of Petrol you are filling -- you are paying a steep tax of Rs 35.49 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 July 2019 shot upto Rs 78.57 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
Fuel Prices in India - based on Prices on 6th July 2019 (after Budget)
| Petrol Price / Litre^ | Diesel Price / Litre^ | |
| New Delhi | Rs 72.96 | Rs 66.69 |
| Mumbai | Rs 78.57 | Rs 69.9 |
| Chennai | Rs 75.46 | Rs 70.48 |
| Kolkata | Rs 75.15 | Rs 68,59 |
| Goa | Rs 68.81 | Rs 67.06 |
^ - Prices as on 6th July 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, 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