Know where your money goes! Petrol and Diesel prices decoded
New Delhi, September 19: The price rise of petrol due to slide in the price of crude oil in the international market resulted in a protest by Biju Janata Dal (BJD) across Odisha on Monday. Clarifying on the price hike the central government decoded the Retail selling price of petrol.
On 16th September 2017, the price of petrol in Delhi was Rs. 70.48 per litre. The trade parity price or Refinery Transfer price is the price at which oil marketing companies (OMCs) lift products from the refineries. Rs. 27.70 is the rate at which OMC’s purchases petrol from the refineries. Secondly Marketing margin and transport cost of Rs.2.75 is added into it. After that Rs.3.57 of dealer’s margin is summed up. After adding the three costs the total gets to Rs.34.02.
Coming to government taxes on petrol, the state government charges Value added tax (VAT) of Rs.14.98 and the central government charges Rs.21.48 as an Excise duty. While the central government transfers 42% of the Excise duty to the State Government which is Rs.9.02 and it is added into VAT totalling it into 27.44 (14.98+9.02). The 14th Finance Commission has recommended a record 10% increase in the states' share in the Union taxes to 42%. The central government’s excise duty gets deducted to Rs.12.46 (21.48-9.02). Adding all the taxes, the retail selling price (RSP) of the petrol sums up to Rs.70.48.
The Petrol and Diesel have been deregulated in June 2010 and October 2014. Tax collected by the centre is spent on Agriculture, Irrigation, Farmer Welfare, Rural Infrastructure, Roads, Railways and Social Welfare Schemes.
Emphasising on the need for a ‘uniform tax mechanism’ across the country, Petroleum Minister Dharmendra Pradhan requested to finance ministry on including petroleum products in the ambit of GST.