With excise duty being hiked five times in a year, taxes and duties now exceeded the actual cost of production of petrol.
As much as Rs31.20 in the retail price of Rs60.70 a litre of petrol in Delhi is because of central and excise duties.
Based on average cost of gasoline and foreign exchange rate during the second half of October, it costs Rs24.75 to produce a litre of petrol at refineries, industry officials said.
After adding company margin and other costs, the price charged to a petrol pump dealer is Rs27.24 per litre. On this price is added Rs19.06 of excise duty that the Centre collects and a dealer commission of Rs2.26 per litre. VAT or sales tax makes up for Rs12.14 in the price of Rs60.70 per litre in Delhi.
Similarly, a litre of diesel at the petrol pump costs Rs45.93 but its cost for a refinery is just Rs24.86. After adding margin, oil companies transfer it to retail petrol pumps for Rs27.05, officials said.
To this is added an excise duty of Rs10.66 per litre and a dealer commission of Rs1.43 a litre. VAT in Delhi adds another Rs6.79 to take the retail selling price to Rs45.93.
The Government had from November 7 raised excise duty on petrol by Rs1.60 per litre and on diesel by 40 paise. The oil companies did not pass on this duty hike to consumers and absorbed all of it at the cost of their margin.
The increase in excise duty on the fuels is likely to yield an additional revenue of about Rs3,200 crore to the Government during the rest of the current fiscal.
The Government had collected Rs99,184 crore in excise collections from the petroleum sector in 2014-15. This was Rs33,042 crore in the first quarter of current fiscal.
The basic excise duty on unbranded or normal petrol was increased from Rs5.46 per litre to Rs7.06 a litre, according to a CBEC notification.
After including additional and special excise duty, the total levy on petrol will be Rs19.06 per litre as against Rs17.46 at present. Similarly, on unbranded or normal diesel, excise duty has been increased from Rs4.26 per litre to Rs4.66 a litre. After including special excise duty, total incidence of excise duty on diesel will be Rs10.66 per litre as against Rs10.26 now.
The Government had previously, in four instalments, raised excise duty on petrol and diesel between November 2014 and January 2015 to take away the reduction in retail rates that was warranted from falling international oil prices.
The four excise duty hikes during this period totalled Rs7.75 per litre on petrol and Rs6.50 a litre on diesel. It led to about Rs20,000 crore in additional revenue to the government, helping it meet its fiscal deficit target.