Petrol and Diesel Prices Calculation Cost in 2020, Fuel Cost to Consumer Computed in India

Know how Fuel Prices are Calculated in 2020 including Taxes Paid for each Litre of Petrol and Diesel Fuel

How the Price of Crude Oil Affects Gas Prices

Fuel Price Calculation in 2020

Crude Oil Prices are its Historic Lows by even going Negative in April 2020 and India has been continuously doing Stockpile of 32 Million Tonne of Crude Oil in April 2020 and now in May 2020 at such low rates so as to keep cost under control in near future, even if Crude increases

But ever Wondering despite of Low Crude Oil Prices – why Fuel Prices are high in India

Calculating Crude Oil Cost – Petrol & Diesel – 2020

Below is Crude Oil Cost Comparison from 3rd March to 6th May 2020

1st January 20206th May 2020
International Price of Brent Crude Oil with Ocean Freight (round off)67$ per Barrel27.2 $ per Barrel
Currency Exchange RateRs 71.4 / USDRs 75.8 / USD
Crude Oil in Indian CurrencyRs 4784Rs 2061
1 Barrel of Crude Oil159 Litre159 Litre
Crude Oil  – Cost per LitreRs 30.08 per LitreRs 12.96 per Litre

 

As can be seen that even after Depreciating Currency, the Crude Oil Cost is 65% lower in May 2020 than as what was in January 2020. But the Benefits are not what passed on to consumers. Now Been Fuel Demand is very Low – Central and State Government took some Steps during Lockdown

» 5th May 2020 (Delhi Government) – VAT on Diesel hiked from 16.75% to 30%. Also VAT on Petrol hiked from 27% to 30%

» 6th May 2020 (Central Government) – Excise Duty and Road Cess on Petrol was hiked by Rs 10 per Litre on Petrol and Rs 13 per Litre on Diesel.

Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi – (as on  6th May 2020)

Petrol Price Calculation*Diesel Price Calculation *
Basic OMC Cost Calculation * (Crude Oil + Refinery Processing + Refinery Margins, OMC Margin + Freight Cost, Logistics )
Fuel Price after Processing, Margins & Transport – Ready to send to Petol PumpRs 18.28 per LitreRs 18.78 per Litre
Central Government Taxes & Dealer Commission
Additional: Excise Duty + Road Cess as Charged by Central Government
Rs 32.98 / Litre on PetrolRs 31.83 / Lit on Diesel
Commission to Petrol Pump DealersRs 3.56 per LitreRs 2.52 per Litre
Fuel Cost Before VAT
Cost as on 6th May 2020Rs 54.82 per LitreRs 53.13 per Litre
VAT Calculation
Additional:VAT (30% on Petrol and 30% on Diesel.  Additional Cess on Diesel) (6th May 2020)Rs 16.44 / Litre on PetrolRs 16.26 / Litre on Diesel
Final Retail Price as on 6th May 2020 in DelhiRs 71.26 per LitreRs 69.39 per Litre

 

ery 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 47.89 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 20 per Litre for Petrol and Diesel. Irony is – we are paying 2 TimesTaxes 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

Tax in November 2014Tax in August 2017Tax in May 2020
Excise  Duty on PetrolRs 9.20 per LitreRs 21.48 per LitreRs 32.98 per Litre (incl. Road Cess)
Excise  Duty on DieselRs 3.46 per LitreRs 17.33 per LitreRs 31.83 per Litre (incl. Road Cess)
VAT on Basic Price on Petrol20% on Basic Price27% on Basic Price30% VAT
VAT on Basic Price on Diesel12.5% on Basic Price16.75% on Diesel + 25p Cess30% VAT

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 (May 2020)

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 FuelTotal Cost of Fuel
Petrol in DelhiRs 49.42 per Litre (69.3%)Rs 71.26 per Litre
Diesel in DelhiRs 48.09 per Litre (69.3%)Rs 69.39 per Litre

Basis – 6th May 2020 Prices in Delhi

It means for Every Litre of Petrol you are filling — you are paying a steep tax of Rs 49.42 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 petrol prices in March 2020 still over Rs 75 per Litre at Rs 76.31 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

» SUV Cars with Best Mileage


 

Fuel Prices in India – based on Prices on 6th May 2020

Petrol Price / Litre^Diesel Price / Litre^
New DelhiRs 71.26Rs 69.39
MumbaiRs 76.31Rs 66.21
ChennaiRs 75.54Rs 68.22
KolkataRs 73.3Rs 65.62
GoaRs 68.61Rs 63.09
BangaloreRs 73.55Rs 65.96
Port BlairRs 60.36Rs 58.71

^ – Prices as on 6th May 2020

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 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

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