A litre of petrol now costs more than Rs 100 in almost all state capitals.
On Monday morning, it crossed the Rs 100-a-litre mark in Delhi, Rajasthan, Madhya Pradesh, West Bengal, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Jammu and Kashmir, Odisha, Tamil Nadu, Ladakh, Punjab and Bihar.
Petrol in Mumbai is the costliest at Rs 110.41 per litre, while diesel stands at Rs 101.03 per litre.
Petrol in the national capital costs Rs 104.44 per litre, up 30 paise since Sunday, while diesel is selling at Rs 93.17 per litre, an increase of 35 paise.
In Kolkata, petrol now costs Rs 105/ litre, while in Bangalore it is at Rs 108.08 per litre. In Chennai, petrol is retailing at Rs 101.79.
The difference in prices across states is due to the different local VAT charges in different cities.
Point to note: Petrol and diesel prices are decided on the basis of freight charges, local taxes, and VAT.
This is the 11th hike in two weeks and the 14th hike since September 24.
According to Bharat Petroleum, 1 litre of oil costs around Rs 41. Now, add Rs 3.79 as commission to the petrol pump dealer, which raises the cost to Rs 44 per litre. The rest is all tax. The Centre charges Rs 32.9 per litre as taxes on petrol while the state taxes vary around Rs 20/ litre.
After adding excise duty, dealer commission and VAT, the retail selling price of the petrol is more than doubled.
Taxes together constitute 58% of the retail selling price of petrol and around 52% of the retail selling price of diesel at present.
The government had increased taxes even when crude prices dropped at the beginning of the pandemic.
Government-owned oil refiners such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum revise the fuel rates daily after taking into account the crude oil prices in the international markets, and the rupee-dollar exchange rates.
Since India imports 85% of its petrol and diesel requirement, the price of fuel is dependent on international crude oil prices.
If the price of a barrel goes up, fuel prices also go up. Oil is also mostly purchased in dollars from the international market, which means if the US dollar is stronger, then India will have to pay more even if the price doesn’t change in the international market.