Petrol Above Rs 100 in Delhi, Mumbai, Kolkata and Chennai. Why Petrol Price is Increasing

Petrol price has crossed Rs 100-a-litre mark in all four metro cities in India — Delhi, Mumbai, Kolkata and Chennai. With the latest revision, the petrol price has touched all-time high in India. The state-run oil marketing companies have increased petrol price at least 36 times in the last two months. Since May 4, the rate of auto fuel has been increased around Rs 9.50-10.

The price of auto fuel in India depends on international crude oil prices, rupee-dollar exchange rate. Moreover, the central government and states levy various taxes — excise duty and Value Added Tax (VAT) on petrol and diesel. Dealer’s commission and freight charges are also added in the fuel price. It must be noted that petrol and diesel do not come under the purview of goods and services tax (GST).

How much tax you pay on a litre of petrol and diesel in Delhi


Let’s consider the petrol price of Rs 98.81 a litre on Jule 1 in Delhi. The base price of the petrol is Rs 38.93, according to state-run oil marketing company Indian Oil. The freight levy is fixed at ₹0.36. The dealers pay Rs 39.29 of petrol in the capital. This price does not include excise duty or VAT. The excise duty levied on petrol is Rs 32.90. The dealer commission is ₹3.82 per litre in Delhi. On this, a further VAT of Rs 22.80 is being added. VAT accounts for about 22% in Delhi. Then comes the final retail selling price of petrol of 98.81 a litre in Delhi. (On July 1).

The Centre raised excise duty by Rs 13 on petrol and Rs 16 on diesel between March 2020 and May 2020. The duty now stands at ₹31.8 on diesel and ₹32.9 on petrol. VAT varies from state to state. Madhya Pradesh, Rajasthan levy over 30% VAT — the highest among states. The dealer’s charge is different for petrol and diesel. The commission also varies with the location of fuel pumps, ranging from Rs 2-4 per litre.