Petrol Tax in Andhra Pradesh: Different Types of Taxes Applicable on Petrol

The information in this article was last updated on 21st October 2022.

The petrol price in Andhra Pradesh is ₹101.52 per litre as on 21st October 2022. One of the determinants that affect the petrol price is the tax imposed by the State and the Central Government.

Moreover, the petrol tax in Andhra Pradesh is dependent on several factors, including VAT and levied taxes.

These factors can significantly impact the current petrol price, which fluctuates with market conditions. Keep reading to understand the factors that affect the petrol tax in AP.

What is the Petrol Tax Levied in Andhra Pradesh?

Petrol price in Andhra Pradesh is based on the daily dynamic fuel pricing method. Factors like taxes, exchange rate and crude oil prices significantly impact the petrol price.

According to a report, the Centre has reduced the excise duty on petrol by ₹5 per litre.

The Government has also asked to reduce the VAT on fuels to offer relief to the public. This led to the petrol prices falling under ₹110.

However, the State Government has ruled out the decision to reduce VAT on petrol and diesel in Andhra Pradesh.

The state government has been collecting an additional VAT of ₹4 and a cess of ₹1, apart from the 31% on petrol.

Elements	Effective as of 21st October 2022 (in ₹ per litre)
Price charged to dealers	₹57.35 per litre
Excise duty (Levied by the Central Government)	₹19.90 per litre
Average dealer commission	₹2.84 per litre
VAT (Levied by the State Government)	₹26.39 per litre {31% of (fuel price charged to dealers + excise duty + avg. dealer commission)}
Retail selling price at Andhra Pradesh	₹111.52 per litre

(Note: The above table serves as an example to explain the petrol tax breakup, with data taken from reliable and authorised sources, as of 21st October 2022 . The actual prices, however, may vary as fuel price, dealer’s commission, cess and other such aspects change periodically. Check the latest petrol prices in Andhra Pradesh)

Who Levies Petrol Tax in Andhra Pradesh?

The state government decides the Andhra Pradesh VAT on petrol while Central Government sets the excise duty.

Hence, petrol and diesel prices in Andhra Pradesh is controlled by Central and State Governments.

7 Factors Affecting Petrol Tax in Andhra Pradesh

These are some of the factors that affect Andhra Pradesh petrol tax.

1. Price of Crude Oil

Crude oil prices keep fluctuating with market conditions. This can affect petrol prices significantly. Additionally, demand and supply, International politics, supply, oil reserves, etc., also impact the crude oil cost.

2. Cost for Dealers

The price charged by OMC or Oil Marketing Companies to dealers again impacts petrol prices in Andhra Pradesh and other states. The factors like refining and freight charges also affect this factor.

3. Dealer’s Commission

Fuel dealers receive a commission from Oil Marketing Companies. This is a part of their earning and profits which impacts petrol price in Andhra Pradesh.

4. Central Excise Duty

Individuals should know that Central Government levies excise duty on fuels in India. This is a pre-defined amount that doesn’t fluctuate with fuel prices. Hence, price remains constant irrespective of the changes in crude oil price.

5. State’s Sales Tax

Every State Government imposes this tax. This sales tax or VAT depends on factors such as dealer’s commission, excise duty, crude oil price, etc.

6. Demand and Supply of Fuel

Keeping the law of economics in mind, demand for petrol and lack of supply increases petrol prices and vice versa. This factor impacts equilibrium of petrol prices and tax levied in India.

7. Value of Indian Rupees Against US Dollars

Since a majority of crude oil is imported internationally, this transaction takes place in US Dollars. Hence, a change in dollar’s value impacts the Indian Rupee. An increase in Dollar’s value will lead to a rise in the purchasing price.

This is essential information on petrol tax in Andhra Pradesh. Taxpayers should keep a tab over the news to find changes in the prices. If confusion prevails, they can consult professionals.

Is the Petrol Tax Same in All Places in Andhra Pradesh.?

The petrol tax across the cities of Andhra Pradesh remains similar. This tax is fixed by the state Government who assess the economic needs and other crucial factors and set a rate.

However, the petrol price can differ across petrol pumps due to the additional dealer’s commission. The oil marketing companies decide the commission. This factor contributes significantly to the profit and loss of a petrol pump operation.

Frequently Asked Questions

✓ Does the Andhra Pradesh Government charge GST on petrol?

No GST isn’t charged on petrol in India.

✓ Does the consumption ratio of refineries affect the petrol prices in Andhra Pradesh?

Yes, a higher number of refineries in Andhra Pradesh will require funds to function, which may increase the petrol prices in the state and vice versa.