Domestic petrol and diesel prices have been on a steep rise since the last month. Though the rates were kept unchanged today, they have been hiked 17 times since May 2021.
On June 1, petrol hit an all-time high of Rs 94.49 a litre, while diesel was priced at Rs 85.38 per litre in Delhi. The price of petrol, which had already crossed the Rs 100-mark in several cities in Rajasthan, Madhya Pradesh and Maharashtra, had breached the psychological barrier in Mumbai on May 29. The price increase on June 1 was the second since then. Petrol now costs Rs 100.72 a litre in Mumbai and diesel comes for Rs 92.69 per litre.
Here are key things to know about rising petrol, diesel prices across cities in India:
When do oil companies revise rates of petrol and diesel?
The prices of petrol and diesel are reviewed by oil marketing companies such as state-run Indian Oil on a daily basis and any revision is implemented from 6 am.
On what factors are petrol, diesel prices based?
Oil companies revise rates of petrol and diesel daily based on the average price of benchmark fuel in the international market in the preceding 15-days, and foreign exchange rates.
Brent crude oil – the most widely used international benchmark – has risen 36 percent this year to more than $70 a barrel. This has prompted an increase in retail fuel prices.
Why fuel prices differ from state to state?
Fuel prices differ from state to state depending on the incidence of local taxes such as VAT and freight charges. Rajasthan levies the highest value-added tax (VAT) on petrol in the country, followed by Madhya Pradesh and Maharashtra.
Where are fuel rates highest in India?
Rates are at the highest in the country in Sri Ganganagar district of Rajasthan where petrol as of today comes for Rs 105.52 a litre and diesel for Rs 98.32 per litre.
How much tax do you pay on petrol, diesel?
Let's understand this with an example.
Now, suppose that the base price of petrol for a given day in Delhi is Rs 34.19 per litre. After adding freight of Rs 0.36 per litre, the rate comes to Rs 34.55 per litre. This is the price charged to dealers and is exclusive of the excise duty and the value-added tax (VAT).
After adding the excise duty and dealer commission of Rs 32.89 per litre and Rs 3.77 per litre respectively, a litre of petrol costs Rs 71.21. On this, VAT - which is Rs 21.36 per litre - is added. This includes VAT on dealer commission. After adding these components, the final selling price comes at Rs 92.57 per litre.
For diesel, let's assume that the base price for a given day in the national capital is 36.32 per litre. Adding freight of Rs 0.33 per litre, excise duty of Rs 31.80 per litre, dealer commission on excise duty of Rs 2.58 per litre and VAT (including dealer commission on VAT) of Rs 12.19 per litre, the final selling price settles at Rs 83.22 per litre in Delhi.
It's important to note here that the government raised excise duty by Rs 13 on petrol and Rs 16 on diesel between March 2020 and May 2020.