Tuesday, 19 January 2016

CRUDE OIL: PETROL PRICE TAX CALCULATION INDIA

Petrol price tax calculation

2014 and then 2015 has seen International Crude Prices hitting all time Low in Jan 2015. Know Computation of Petrol and Diesel Prices in Chennai India
Last Updated on 1st September 2015

Fuel Price Calculation in 2015

With Fuel Prices now getting changed Frequently, know how is fuel prices computed in India

Calculating Crude Oil Cost - Petrol & Diesel - 2015

If you reading Internationally, the price of crude Oil hovers at 48 Dollar - which is roughly equivalent to Rs. 3000 (keeping the exchange rate around Rs. 65).
On Importing Oil - Barrel Cost + Ocean Freight at 2 Dollar needs to be paid - effectively implying - 50$ per barrel as import cost.
» 1 barrel of crude Oil is Equivalent to around 159 Litres of Crude Oil
» Raw Crude Oil in Indian Currency: Rs. 3185 / 159 = Rs 20 per Litre approx
Simplified Calculation Chart for Petrol & Diesel Prices in New Delhi - September 2015

Petrol Diesel
International Price of Crude Oil with Ocean Freight (as in Jan 2015) 49$ or Rs 3185 per Barrel 49$ or Rs 3185 per Barrel
1 Barrel of Crude Oil 159 Litre 159 Litre
Crude Oil  - Cost per Litre Rs 20 per Litre Rs 20 per Litre



Basic OMC Cost Calculation

Refinery Processing & Transportation Cost Rs 6 per Litre Rs 4.6 per Litre
OMC Margin, Transportation, Freight, Landing to Dealers Rs 3.9 per Litre  Rs 2.1 per Litre 
Basic Cost OMC - Pricing Charged to Dealers including Processing, Transportation, Margins etc Rs 29.9 per Lit Rs 26.7 per Lit



Calculating Dealer Retail Price - Base Location Delhi

Excise Duty as on 1st September 2015 Rs 17.46 on Petrol Rs 10.26 on Diesel
Commission to Petrol Pump Rs 2.27 per Lit Rs 1.42 per Litr
Fuel Cost Before VAT (rounded off for approximation) Rs 49 per Lit Rs 38 per Lit
VAT (Varies from State to State - 25% on Petrol & 16.6% on Diesel with Surcharge) Rs 12.25 on Petrol Rs 6.6 on Diesel
Final Retail Price as on 1st September 2015 - approx calculation Rs 61.25 per Lit Rs 44.6 per Litre

Had it been ideal world - we would have ended up with Fuel Cost of Rs 30 to 32 per Litre for Petrol and Rs 28 / Litre for Diesel Fuel

Now comes Taxation Scenario on Petrol and Diesel Fuel

» Excise Duty (including Education Cess - as on September 2015) - Rs. 17.46 for Petrol and Rs 10.26 per Litre on Diesel (There has been Multiple Excise Hikes in 2015) - goes to Central Government
For Info - Excise Duty was Rs 9.20 on Petrol and Rs 3.46 on Diesel on 1st November 2014 - which has increased gradually and are now almost 90% higher for Petrol and 200% higher for Diesel
» VAT on Gross Price (on Price + Excise Duty) * (@ 25% on Petrol, 16.6% on Diesel) - Rs. 10 on Petrol, Rs 5 for Diesel - goes to State Government. VAT also increased in Delhi by Aam Aadmi Party
Disclaimer :- Approximate Closest Figures Used, Fuel Price Calculation done in Delhi