04 February 2023 by Gagan Modi
Know how Fuel Prices are Calculated in2023 including Taxes Paid for each Litre of Petrol and Diesel Fuel
Fuel Price Calculation in 2023
Crude Oil Priceswentto its Historic Lows by even going Negative in April 2020 during Covid times, but went steadily going upto almost at its highs in 2021 and in 2022 at over 100$ per barrel, and now at around 83$ per Barrel in 2023
Earlier in 2022 due toInflationary aspect, Central Government reduced Excise Duty by Rs 8 per Litre on Petrol and Rs 6 per Litre on Diesel - reducing prices to a considerable extent. Also importinghigher Crude from Russia took Government to control in Crude Oil Price as against Brent Crude. Even some State Government like Rajasthan, Odisha, Kerala were first movers to also follow VAT duty cut too
To Demystify the final cost of Petrol and Diesel - important to check how much Crude Oil Cost in Litre
Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - (as on4thFebruary 2023)
| Petrol Price Calculation* | Diesel Price Calculation * | |
| Basic OMC Cost Calculation | ||
| Crude Oil (from Brent Crude + Russian Import + Other Crude Import) | Rs 40per Litre | Rs 40per Litre |
| OMC Processing Cost (Freight + Refinery Processing + Refinery Margins + OMC Margin + Logistics + Operational Costs) | Rs 7.35 per Litre | Rs 8.15 per Litre |
| Buffer for Future Inflationary Aspect etc | Rs 10 per Litre | Rs 10 per Litre |
| Fuel Price after Processing(Ready to send to Petol Pump) | Rs 57.35 per Litre | Rs 58.15 per Litre |
| Central Government Taxes & Dealer Commission | ||
| Additional: Excise Duty + Road Cess as Charged by Central Government (after Excise Duty Cut in November) | Rs 19.9 / Litre on Petrol | Rs 15.8 / Lit on Diesel |
| Commission to Petrol Pump Dealers | Rs 3.8per Litre | Rs 2.6 per Litre |
| Fuel Cost Before VAT | ||
| Cost as on4thFeb 2023 | Rs 81.05 per Litre | Rs76.55 per Litre |
| VAT Calculation | ||
| Additional:VAT (19.4% on Petrol and 16.75% on Diesel. Additional Cess on Diesel)(4thFeb 2023) - Delhi | Rs 15.67 / Litre on Petrol | Rs 13.07 / Litre on Diesel |
| Final Retail Price as on4thFeb 2023 in Delhi | Rs96.72 per Litre | Rs89.62 per Litre |
| Final Retail Price as on4thFeb 2023 in Mumbai (due toVAT as charged over Rs 30 per Litre in Maharashtra and over Rs 20 per Litre on Diesel) | Rs106.31 per Litre | Rs 94.27 per Litre |
Very Important: The Petrol been Sold in India from End 2017 has 10% of Ethanolbeen 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 Rs63.5per 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 without Taxes - we would have still ended up with Fuel Cost of Rs 50 per Litre for Petrol and Diesel in India.
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
| Month, Year | Excise Duty on Petrol | Excise Duty on Diesel | VAT on Petrol on Basic Price | VAT on Diesel on Basic Price |
| November 2014 | Rs 9.2 per Litre | Rs 3.46 per Litre | 20% | 12.50% |
| December 2017 | Rs 21.48 per Litre | Rs 17.33 per Litre | 27% | 16.75% + 25 p Cess |
| June 2020 | Rs 32.98 per Litre | Rs 31.83 per Litre | 27% | 16.75% + 25 p Cess |
| November 2021 | Rs 27.98 per Litre | Rs 21.8 per Litre | 19.4% | 16.75% + 25 p Cess |
| May 2022 | Rs 19.98 per Litre | Rs 15.8 per Litre | 19.4% | 16.75% + 25 p Cess |
| February 2023 | Rs 19.98 per Litre | Rs 15.8 per Litre | 19.4% | 16.75% + 25 p Cess |
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 (Feb2023)
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 Fuel | Total Cost of Fuel | |
| For 1 Litre Petrol in Delhi | Rs 35.57 per Litre (36.7%) | Rs96.72 per Litre |
| For 1 Litre Diesel in Delhi | Rs 28.87 per Litre (32.2%) | Rs 89.62 per Litre |
Basis -22nd May 2022 Prices in Delhi
While, estimated Tax in Mumbai as required for 1 Litre of Fuel
| Estimated Tax in Mumbai | Total Cost of Fuel | |
| For 1 Litre Petrol inMumbai | Around Rs45 per Litre | Rs106.31 per Litre |
| For 1 Litre Diesel inMumbai | Around Rs33 per Litre | Rs94.27 per Litre |
It means for Every Litre of Petrol you are filling -- you are paying a tax of almost Rs 35+ per Litre in Delhi to State and Central Government. Its even higher in Other cities
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 on4thFeb 2023
| Petrol Price / Litre^ | Diesel Price / Litre^ | |
| New Delhi | Rs96.72 | Rs89.62 |
| Mumbai | Rs106.31 | Rs94.27 |
| Chennai | Rs102.63 | Rs94.24 |
| Kolkata | Rs106.03 | Rs92.76 |
| Lucknow | Rs 96.57 | Rs 89.76 |
| Noida, Ghaziabad | Rs96.79 | Rs 89.96 |
| Gurgaon | Rs 97.18 | Rs 90.05 |
| Bangalore | Rs101.94 | Rs87.89 |
| Hyderabad | Rs109.66 | Rs97.82 |
| Chandigarh | Rs96.2 | Rs84.26 |
| Shimla (Himachal Pradesh) | Rs 97.2 | Rs 86 |
^ - Prices as on4thFebruary 2023
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, Rajasthan, 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
More on New and Used list in India
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