Taxes levied on gasoline and diesel by the central and state governments are again in the spotlight as domestic gasoline prices hit record highs. In Delhi today gasoline prices were on retail sale £84.70 per liter while diesel was in retail £74.88 per liter after a night hike of 25 Paise. In addition to taxes, the price of gasoline and diesel you pay at the pump in India depends on international product prices, the rupee dollar exchange rate, and other factors such as dealer margin and freight costs. Petrol and diesel are not subject to the goods and services tax (GST).
Based on the gasoline price on January 1st in Delhi from £83.71 per liter was the base price of the fuel £27.37 per liter according to the Indian Oil website. Including freight charges from £0.37 per liter, price for dealers (excluding excise tax and VAT) was £27.74 per liter.
In addition there is the excise duty of £32.98 per liter and dealer commission, on average £3.67 per liter. To do this, add additional sales tax or sales tax (including sales tax on merchant commission) from £19.32 per liter. Then comes the final selling price for gasoline from £83.71 per liter ((price as of January 1) in Delhi.
Let’s consider the selling price of diesel on January 1st from £73.87 per liter in Delhi. According to the Indian Oil website, this was the base price £28.32 per liter. There are also freight costs of £0.34 liters, which is the price charged to dealers (excluding excise tax and VAT) £28.66 per liter. Then add the excise tax from £31.83 per liter, dealer commission (average) £2.53 liters and VAT (including VAT on dealer commission) £10.85 liters, the final retail price in Delhi is around £73.87 per liter (price as of January 1st).
India’s fuel consumption spiked for the fourth straight year in December as economic activity and transportation demand continued to recover after a coronavirus-induced disruption.
The petrol and diesel tariffs are to be adjusted daily to the international reference prices and exchange rates.
The central government had increased the consumption tax £13 per liter on gasoline and from £15 liters of diesel in two installments in March 2020 and May 2020 to cover the costs of the fight against coronavirus.
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