Quick Look: Here's How Govt Sets Petrol & Diesel Prices

By siliconindia | Thursday, 12 November 2015, 09:46 Hrs

BENGALURU: If looked at the price of petrol in the country, then the taxes and duties set hike to the price of petrol over actual cost of production.

As excise duty rose up to five times this year, the present price of petrol is 60.70 per litre while its cost of production is 24.75, as per industry experts.

The case is exactly the same in case of diesel. The petrol pump cost is 45.93 while the cost of production is 24.86.

The government made total collection of 99,184 crore from the excise collections of petroleum sector in 2014-15.

Citizens sink in such price hike, unaware of the taxation policies and methods of the government. To not let you be in dilemma, here’s an explanation to the government actions on tax of petrol and diesel, reports Financial Express.

Pricing Of Petrol

The cost of production for a litre of petrol is 24.75. The petrol pump deal is charged RS.27.24 keeping company margin and other costs in hand. Excise duty of 19.06 is imposed by the Centre and dealer commission of 2.26. Plus, VAT or sales tax of RS.12.14, makes the price of petrol per litre come to 60.70.