Petrol Diesel Price | How Petrol Diesel Price Decided And How Many Taxes On Petrol Diesel | How does 25 rupees petrol reach 81 rupees? How do governments earn from this?


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19 minutes agoAuthor: Priyank Dwivedi

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Petrol and diesel are such things, whose prices are constantly increasing. If there are ever less, it does not affect our pocket much. Often people say that in the international market, the price of crude oil i.e. crude oil is going down, even then the prices of petrol and diesel in our country are not reduced. What is the reason for this? And how the price of petrol and diesel increases by 3 times as you reach it? How much do governments benefit from this? Let’s understand …

First thing, how does petrol and diesel reach you

  1. India imports more than 85% of its petroleum petrol requirement. That is, he buys from another country.
  2. Crude oil coming from abroad goes to the refinery, from where petrol, diesel and other petroleum products are extracted.
  3. After this it goes to the oil companies. Such as Indian Oil, Hindustan Petroleum. From here they make their profits and deliver them to the petrol pump.
  4. The owner of the petrol pump adds his commission after he arrives at the petrol pump. The tax paid by the central and state governments gives you that price.

The government gets 1 liter of petrol for 25 rupees, till we reach it becomes more than 80

It happens that the government buys crude oil from abroad. This crude oil the government buys in barrels. One barrel means about 159 liters. On 16 November this year, the price of 1 liter petrol in Delhi was Rs 81.06. According to Indian Oil Corporation, the base price of 1 liter petrol was Rs 25.37. After this, the excise duty of Rs 32.98, VAT of Rs 18.71, after that the owner of petrol pump made commission of Rs 3.64 and after the second tax, its price reached 81 rupees 6 paise.

1 liter of diesel is also worth 25 rupees, by coming to you it becomes more than 70.

Like petrol, the base price of diesel is also Rs 25. On 16 November, the base price of 1 liter petrol in Delhi was Rs 24.42. It cost Rs 0.33. This was followed by excise duty of Rs 31.83, VAT of Rs 10.36 and commission of the owner of petrol pump of Rs 2.52. After this, the price of 1 liter diesel became 70 rupees 46 paise.

Now know how the government earns from your money?

Central government: government charges excise duty

The central government imposes excise duty on the price of petrol and diesel. In May this year, the central government increased the excise duty on petrol and diesel. Currently, Rs 32.98 is charged on one liter petrol and Rs 31.83 on diesel.

When the Modi government came in May 2014, there was an excise duty of Rs 9.48 on one liter of petrol and Rs 3.56 on diesel. This is the reason why petrol-diesel prices do not come down even after crude oil prices are low. Since the Modi government came to power in May 2014, excise duty has been reduced 16 times so far. However, it happened only 3 times.

This is also because the government also earns a lot from it. According to the Petroleum Planning and Analysis Cell (PPAC), the government has earned Rs 49,914 crore from the first quarter of this year ie from April to June through excise duty and separate tax on petroleum products. This earning would have been more had it not come to Corona and would not have put a lockdown.

State Governments: Earn by levying VAT (figures for first quarter of 2020-21) (Source:

The central government earned by levying excise duty and different taxes. Now state governments also earn from you by levying VAT. The central government is only one, so the same excise duty will be levied throughout the country. But, if the states are different, then the rate of VAT also varies.

According to PPAC, the state governments earned Rs 29,812 crore in the first quarter of this year through VAT, sales and different taxes. The Telangana government charges the highest VAT in the entire country. Here 35.20% tax is levied on petrol and 27% on VAT diesel. It is followed by Tamil Nadu and Madhya Pradesh government at number three.


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