Do you know that the Govt of India and the State is bloody bleeding us on oil prices?
Ever wondered why oil companies keep complaining about mounting losses even as you shell out more at fuel stations. The reason being that every time you tank up, the Central and state governments get richer at your expense. Consider this, each rupee you spend on buying petrol in Delhi, almost 51 paise out of that goes to the two governments by way of various taxes and surcharge. In case of diesel, they walk away with about 24 paise of every rupee. This will vary marginally in other cities due to the difference in state taxes.
A back-of-the-envelope calculation shows that on a national average price of Rs 47 per litre of petrol, you pay approximately Rs 26 as taxes. Similarly, taking an average countrywide price of Rs 35 for diesel, around Rs 13 goes to the government's kitty.
Admittedly, these are ballpark figures and there are many variables such as the rupee exchange rate and varying efficiency of refineries besides other cost build-ups.
The story gets better with cooking gas because it has been given the status of 'declared goods' . This means states cannot use it as a milch cow and levy a uniform 4% sales tax against an average of 21% on diesel and 27% on petrol. So out of an average price of Rs 300 for a cylinder, the governments get about Rs 11 as taxes, while they get about 40 paise from sale of each litre of kerosene that costs close to Rs 10 a litre.
Taking an average crude price of $69 a barrel, a rough calculation shows that the leftover after paying taxes and other costs does not even cover the cost of buying crude. For example , the cost of crude comes to about Rs 23 a litre but the companies are actually left with Rs 21 after accounting for other costs and commissions, from sale of each litre of petrol. Similarly, they get around Rs 22 from each litre of petrol.
The Budget on Friday raised customs duty on motor fuels by 5% to 7.5% and also slapped the excise duty of Re 1 a litre. It also slapped a 5% customs duty on crude. These moves created an impact of Rs 2.71 a litre on petrol and Rs 2.55 on diesel. The actual hike of retail prices were a little higher due to incremental increase in other surcharge and local levies.
At the pre-budget rates, major Central tax components on petrol included the basic cenvat duty of Rs 5.35 a litre, special additional excise duty of Rs 7, additional excise duty of Rs 2, a notional basic customs duty at 2.5%, additional customs duty (countervailing duty) of Rs 5.35 plus Rs 6 special additional duty as well as an additional customs duty of Rs 2. In addition, a 2% education cess is also charged.
On diesel, the Central taxes include a Rs 1.60 basic cenvat duty, additional excise duty of Rs 2, a notional basic customs duty at 2.5%, additional customs duty (countervailing duty) of Rs 1.60 and an additional customs duty of Rs 2.
The states, too, add their bit as sales tax and pollution cess. Among the states, Andhra Pradesh has the highest fuel tax rate of 33%, followed by Tamil Nadu with 33% and Maharashtra 30%. Haryana has the cheapest tax rate of 9%. A majority of the remaining states tax fuels between 18 and 28%.
