Know how is Fuel Cost to Consumer Computed. Petrol and Diesel Prices Calculation Cost in 2022
Date: January 5, 2022 by Gagan Modi
Know how Fuel Prices are Calculated in 2022 including Taxes Paid for each Litre of Petrol and Diesel Fuel
Fuel Price Calculation in 2022
Crude Oil Prices went to its Historic Lows by even going Negative in April 2020 during Covid times, but went steadily going up to almost at its highs in 2021 and in 2022 now hovers at 80$ per barrel.
To Demystify the final cost of Petrol and Diesel - important to check how much Crude Oil Cost in Litre
Calculating Crude Oil Cost - Petrol & Diesel - 2022
Below is Crude Oil Cost to Final Price of Petrol and Diesel
| Crude Oil to Final Fuel Price | 4th January 2022 |
| International Price of Brent Crude Oil | 80 $ per Barrel |
| Currency Exchange Rate | Rs 74.57 / USD |
| Crude Oil in Indian Currency | Rs 5965 |
| 1 Barrel of Crude Oil | 159 Litre |
| Crude Oil - Cost per Litre | Rs 37.51 per Litre |
| Petrol Price - Per Litre (Delhi) as on 4th January 2022 | Rs 95.41 per Litre |
| Diesel per Litre (Delhi) as on 4th January 2022 | Rs 86.67 per Litre |
Now how this 37 Rs Litre Crude Oil turns to Rs 95 Rs Litre Petrol has a separate story.
Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - (as on 4th January 2022)
| Petrol Price Calculation* | Diesel Price Calculation * | |
| Basic OMC Cost Calculation | ||
| Crude Oil | Rs 37.51 per Litre | Rs 37.51 per Litre |
| OMC Processing Cost (Freight + Refinery Processing + Refinery Margins + OMC Margin + Logistics + Operational Costs etc) | Rs 10.7 per Litre | Rs 12.58 per Litre |
| Fuel Price after Processing (Ready to send to Petol Pump) | Rs 48.21 per Litre | Rs 50.09 per Litre |
| Central Government Taxes & Dealer Commission | ||
| Additional: Excise Duty + Road Cess as Charged by Central Government (after Excise Duty Cut in November) |
Rs 27.9 / Litre on Petrol | Rs 21.8 / Lit on Diesel |
| Commission to Petrol Pump Dealers | Rs 3.8 per Litre | Rs 2.6 per Litre |
| Fuel Cost Before VAT | ||
| Cost as on 4th January 2022 | Rs 79.91 per Litre | Rs 74.49 per Litre |
| VAT Calculation | ||
| Additional:VAT (19.4% on Petrol and 16.75% on Diesel. Additional Cess on Diesel) (4th January 2022) | Rs 15.5 / Litre on Petrol | Rs 12.18 / Litre on Diesel |
| Final Retail Price as on 4th January 2022 in Delhi | Rs 95.41 per Litre | Rs 86.67 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 60 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 50 per Litre for Petrol and Diesel. Irony is - we are still in zone of close to 80% Taxes as against 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 2022 | |
| Excise Duty on Petrol | Rs 9.20 per Litre | Rs 21.48 per Litre | Rs 27.9 per Litre (incl. Road Cess) |
| Excise Duty on Diesel | Rs 3.46 per Litre | Rs 17.33 per Litre | Rs 21.8 per Litre (incl. Road Cess) |
| VAT on Basic Price on Petrol | 20% on Basic Price | 27% on Basic Price | 19.4% VAT - lowest VAT in 8 yr by Delhi Government charged |
| 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 2022)
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 43.4 per Litre (45.5%) | Rs 95.41 per Litre |
| Diesel in Delhi | Rs 33.98 per Litre (39.2%) | Rs 86.67 per Litre |
Basis - 4th January 2022 Prices in Delhi
It means for Every Litre of Petrol you are filling -- you are still paying a steep tax of almost Rs 43+ per Litre in Delhi to State and Central Government. Its even higher in Other cities
If you are Staying in Mumbai or Rajasthan- you are paying one among highest Taxes on Petrol Prices in India. Reason Mumbai has one among highest State Level Taxes (VAT with additional Surcharge) and petrol prices in January 2022 continue to be high of close to Rs 109 per Litre and for select cities in MP, Rajasthan, still at Rs 110 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
Fuel Prices in India - based on Prices on 4th January 2022
| Petrol Price / Litre^ | Diesel Price / Litre^ | |
| New Delhi | Rs 95.41 | Rs 86.67 |
| Mumbai | Rs 109.98 | Rs 94.14 |
| Chennai | Rs 101.5 | Rs 91.52 |
| Kolkata | Rs 104.67 | Rs 89.79 |
| Noida, Ghaziabad | Rs 95.29 | Rs 86.8 |
| Bangalore | Rs 100.58 | Rs 85.01 |
| Hyderabad | Rs 108.2 | Rs 94.62 |
| Jaipur | Rs 107.37 | Rs 90.98 |
| Chandigarh | Rs 94.23 | Rs 80.90 |
| Sri Ganganagar | Rs 112.11 | Rs 95.26 |
^ - Prices as on 4th January 2022
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, Rajasthan, 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