Duty Hike Effect: Taxes Exceed Actual Cost Of Petrol [Analysis]

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Petrol at the moment costs Rs 60.70/- per litre in Delhi. However, 50 percent of the cost, i.e., Rs 31.20/- is the tax charged by the Indian government. As of today, the cost of making petrol is only Rs. 24.75/- per litre. So, why are we paying Rs. 60.70/-? Here is a closer look at the petrol cost breakup.

– The cost of making petrol:  Rs. 24.75/-
– The cost of petrol sold to dealer:  Rs. 27.24/-
– Excise duty collected by Centre: Rs. 19.06/-
– VAT or Sales tax per litre: Rs. 12.14/-
– Dealer (petrol pump) commission: Rs. 2.26/-

Now, adding the cost of what the dealer gets from the refinery, excise duty, VAT, and the dealer commission, we end up paying Rs. 60.70/- for a litre of petrol. The VAT and excise duty alone costs a consumer Rs. 31.20/- for a litre of petrol.

On the flipside, diesel is priced at Rs. 45.93/- in Delhi for a litre. Here is a closer look at the diesel cost breakup.

– The cost of making diesel: Rs. 24.86/-
– The cost of petrol sold to dealer: Rs. 27.05/-
– Excise duty collected by Centre: Rs. 10.66/-
– VAT or Sales tax per litre: Rs. 6.79/-
– Dealer (fuel pump) commission: Rs. 1.43/-

Now, adding the cost of what the dealer gets from the refinery, excise duty, VAT, and the dealer commission, we end up paying Rs. 45.93/- per litre. The VAT and excise duty alone costs a consumer Rs. 17.45/- for a litre of diesel.

Do you feel cheated regarding all the taxes you are paying to the government?

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