New Delhi: With excise duty being hiked five times in a year, taxes and duties now exceeded the actual cost of production of petrol.
As much as Rs 31.20 in the retail price of Rs 60.70 a litre of petrol in Delhi is because of central and excise duties.
Based on average cost of gasoline and foreign exchange rates during the
second half of October, it costs Rs 24.75 to produce a litre of petrol
at refineries, industry officials said.
After adding company margin and other costs, the price charged to a
petrol pump dealer is Rs 27.24 per litre. On this price is added Rs
19.06 of excise duty that the Centre collects and a dealer commission of
Rs 2.26 per litre. VAT or sales tax makes up for Rs 12.14 in the price
of Rs 60.70 per litre in Delhi.
Similarly, a litre of diesel at the petrol pump costs Rs 45.93 but its
cost for a refinery is just Rs 24.86. After adding margin, oil companies
transfer it to retail petrol pumps for Rs 27.05, officials said.
To this is added an excise duty of Rs 10.66 per litre and a dealer
commission of Rs 1.43 a litre. The VAT (value-added tax) in Delhi adds
another Rs 6.79 to take the retail selling price to Rs 45.93.
The government had from November 7 raised excise duty on petrol by Rs
1.60 per litre and 40 paise on diesel. The oil companies did not pass on
this duty hike to consumers and absorbed all of it at the cost of their
The increase in excise duty on the fuels is likely to yield an
additional revenue of about Rs 3,200 crore to the government during the
rest of the current fiscal year.
The government had collected Rs 99,184 crore in excise collections from
the petroleum sector in 2014-15. This was Rs 33,042 crore in the first
quarter of current fiscal year.
The basic excise duty on unbranded or normal petrol was increased from
Rs 5.46 per litre to Rs 7.06 a litre, according to a CBEC (Central Board
of Excise and Customs) notification.
After including additional and special excise duty, the total levy on
petrol will be Rs 19.06 per litre as against Rs 17.46 at present.
Similarly, on unbranded or normal diesel, excise duty has been increased from Rs 4.26 per litre to Rs 4.66 a litre.
After including special excise duty, total incidence of excise duty on
diesel will be Rs 10.66 per litre as against Rs 10.26 now.
The government had previously, in four instalments, raised excise duty
on petrol and diesel between November 2014 and January 2015 to take away
the reduction in retail rates that was warranted from falling
international oil prices.
The four excise duty hikes during this period totalled Rs 7.75 per litre
on petrol and Rs 6.50 a litre on diesel. It led to about Rs 20,000
crore in additional revenue to the government, helping it meet its
fiscal deficit target.
Tax on petrol and diesel was first raised by Rs 1.50 a litre each from November 12, 2014.
Then again, from December 2, 2014, the excise duty on petrol was raised by Rs 2.25 per litre and by Rs 1 on diesel.
This was followed by the government hiking excise duty on petrol and
diesel by Rs 2 per litre each from January 2, 2015 and a similar
proportion from January 16, 2015.