Know how is Fuel Cost to Consumer Computed. Petrol and Diesel Prices in 2018 on its Peak

Date: October 2, 2018

Fuel Prices are its Peak high in both Petrol and Diesel of Recent Times. Know how Fuel Prices are Calculated in 2018

Last updated on 1st October 2018

Fuel Price Calculation in 2018

Petrol and Diesel Prices have steadily been increasing after daily price revisions

Been - that Fuel Prices in India are excluded from GST Framework by the Government of India, and despite of slight cut in Excise Duty - due to International Crude prices on its recent highs - Petrol and Diesel Prices are also on its peak

Some of the reasons of Price Hike in last 18 Months 

1. Hike in Crude Oil Prices from 45$ / Barrel to 84 $ / Barrel

2. Increase in Petrol Pump Commissions by almost Rs 1 per Litre in Petrol and Diesel

3. Depreciating Rupee against Dollar by crossing records lows of Rs 72.5 against 1 Dollar

Calculating Crude Oil Cost - Petrol & Diesel - 2018

If you reading Internationally, the price of crude Oil hovers at around 84 Dollar and Rupee has also gained Strong in Recent Tines 

On Importing Oil - Barrel Cost + 1.5$ Ocean Freight of needs to be paid - effectively implying - 85.5 $ per barrel as import cost. This is Equivalent to Rs 6196 in INR (keeping exchange rate at Rs. 72.47 / USD )

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

» Raw Crude Oil in Indian Currency: Rs. 5640 / 159 = Rs 35.89 per Litre approx

Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - (1st October 2018)

* - Prices as on 1st October 2018, 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 45 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

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)

Basis - October 2018 Prices in Delhi

It means for Every Litre of Petrol you are filling -- you are paying a steep tax of Rs 37.28 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 prices in October are over Rs 90 per Litre. The Excise+VAT+Surcharge in Mumbai to almost 39.12% alone in Petrol.

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 October 2018

^ - Prices as on 1st October 2018

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 one among lowest VAT

VAT Rates on Petrol and Diesel

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

More on New and Used Cars in India

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