Government is not in complete agreement on immediate cuts tax on petrol and diesel According to an ET report, the proposal to cut duty on fuel by the oil ministry has not got the support of the finance ministry. Officials of the ministries recently held discussions with oil marketing companies (OMCs) on how to handle the spike in international crude oil prices.
The report, quoting sources, said finance ministry officials pushed companies to do more to deal with rising prices.
price of petrol Thursday remained unchanged for the eighth day in a row, while diesel prices also followed cues. Petrol currently costs Rs 105.41 per liter in Delhi and a record Rs 120.51 per liter in Mumbai. Diesel prices also maintained the status quo at Rs 96.67 per liter in Delhi and Rs 104.77 per liter in Mumbai.
Various Taxes and Duties on Petrol
According to a notification by Indian Oil Corporation, let us take the example of petrol price in Delhi on April 1 (the break-up of which is the latest available), when it was Rs 101.81 per litre.
The base price of petrol on April 1 was Rs 53.34 per liter. Above this a freight charge of 20 paise was levied on every litre. These two components make up the dealer’s fee (excluding excise duty and value added tax) at Rs 53.54 per litre.
Apart from this, excise duty of Rs 27.90 per liter is levied by the Center. There is also a State Value Added Tax (VAT) of Rs 16.54, which includes VAT on dealers’ commission. An average dealer commission of Rs 3.83 per liter of petrol is also added. All these taxes and fees add up to Rs 101.81 on petrol price as of April 1.
Petrol price hike recently
Petrol and diesel prices have recently been hiked by around Rs 10 after rising continuously for almost 17 days. The hike in petrol prices was stopped in November and started rising after the results of the state elections were announced on March 22.
Retail prices of petrol and diesel in India are linked to international crude oil prices. And, ever since Russia invaded Ukraine, global oil prices have remained high, halting global oil supplies.
After Russia approved a military operation in Ukraine on 24 February, Brent crude oil prices hit US$100 a barrel for the first time since 2014. In the following days, US WTI crude futures rose to USD 130.50 per barrel, its highest level. From July 2008, before retreating. Brent also touched a high of $139.13, the highest level since July 2008. Currently, crude oil is at $ 108.15 per barrel.
The variation in the prices of petrol and diesel is due to two reasons – difference in freight rates and different VAT rates across states. Freight charges depend on the distance between the refining plant and the petrol pump; The farther the petrol pump is from the oil refining unit, the higher will be the freight charges. Because of this, prices can vary from region to region.
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