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Indians pay highest petro-tax in Asia-Pac
By agencies
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Wednesday, 11 May 2005, 19:30 IST
NEW DELHI: Do you know you pay more for petrol than the consumers of most other countries in the Asia-Pacific region? Not because oil companies are fleecing you, but because the government levies the highest taxes in the region when it comes to auto fuel.
Indias petro taxes are not just high, they are the highest in the entire Asia-Pacific region. Total taxes from the oil sector were a whopping 
9.2 trillion in 04-05. While the total tax levies (Center and state) on petrol are as high as 62.7 percent in India, it is as low as 27.1 percent in Thailand, and 45 percent in neighboring Pakistan. Australia happens to be the closest to India with a tax rate of 45.9 percent, the financial daily Economic Times reported.
Its the same story for diesel. The total tax levy on diesel is 43.9 percent even though the product is the main transport fuel for most public conveyance. High global crude prices translate into different retail prices in different nations, thanks to the different tax regimes.
Everywhere, the government takes its share of petro revenues. The trouble with the manner in which the Indian government extracts its pound of flesh is that it leaves both consumers and petro marketing companies bleeding. So much for the stated policy of equitable burden sharing.
While fuel consumers pay the second highest retail price in the region. Normally, lowered retail prices lead to depressed margins for oil cos. But its not so in neighboring countries. A comparative analysis shows that while Indian oil cos are currently incurring negative refining and marketing (R&M) margins, companies in the Asia-Pacific region are comfortably off with high margins.
For example, while the current R&M margin for petrol in India is $5.8 per barrel, it is $53.41 per barrel in Singapore and $17.71 in Pakistan. Says P Raghavendran, president of Reliance Industries, Indian oil cos are in the negative as far as R&M margins are concerned. We need to earn at least $14 a barrel to be positive. The story is no different with diesel. Although margins on diesel sale are relatively better at $14.7 a barrel, it is still far lower than those for other countries in the region.
Besides, oilcos in India are footing a part of the levies, thanks to the government decision to disallow price revisions. We are losing money and some companies are already in the red. Global prices have gone through the roof and the added duty impact is making things worse, says a senior IOC official, the report added.
9.2 trillion in 04-05. While the total tax levies (Center and state) on petrol are as high as 62.7 percent in India, it is as low as 27.1 percent in Thailand, and 45 percent in neighboring Pakistan. Australia happens to be the closest to India with a tax rate of 45.9 percent, the financial daily Economic Times reported.
Its the same story for diesel. The total tax levy on diesel is 43.9 percent even though the product is the main transport fuel for most public conveyance. High global crude prices translate into different retail prices in different nations, thanks to the different tax regimes.
Everywhere, the government takes its share of petro revenues. The trouble with the manner in which the Indian government extracts its pound of flesh is that it leaves both consumers and petro marketing companies bleeding. So much for the stated policy of equitable burden sharing.
While fuel consumers pay the second highest retail price in the region. Normally, lowered retail prices lead to depressed margins for oil cos. But its not so in neighboring countries. A comparative analysis shows that while Indian oil cos are currently incurring negative refining and marketing (R&M) margins, companies in the Asia-Pacific region are comfortably off with high margins.
For example, while the current R&M margin for petrol in India is $5.8 per barrel, it is $53.41 per barrel in Singapore and $17.71 in Pakistan. Says P Raghavendran, president of Reliance Industries, Indian oil cos are in the negative as far as R&M margins are concerned. We need to earn at least $14 a barrel to be positive. The story is no different with diesel. Although margins on diesel sale are relatively better at $14.7 a barrel, it is still far lower than those for other countries in the region.
Besides, oilcos in India are footing a part of the levies, thanks to the government decision to disallow price revisions. We are losing money and some companies are already in the red. Global prices have gone through the roof and the added duty impact is making things worse, says a senior IOC official, the report added.