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The information in this article was last updated on 21st October 2022.
A current economic setback led to a rapid increase in fuel prices across the nation. It reached a bar of almost ₹100 per litre within November 2021. However, the Union Government of India is constantly trying to lower this price for ease of all countrymen. Cutting down excise duty on fuel is one of the steps they have taken so far.
On top of that, the Haryana Government recently slashed the VAT on petrol in Haryana. This reduces fuel’s price by ₹12 per litre in that state. However, VAT is not the only factor determining fuel’s price. Several taxes are applicable on petrol and diesel that affect the all-over price in India.
Let’s have a look at each of them.
Tax on petrol in Haryana typically comprises a basic price of crude oil, VAT, excise duty and dealer’s commission.
In November 2021, the Union Government of India slashed the excise duty on both petrol and diesel. Following suit, Haryana’s state government also reduced sales tax on petrol, thereby making petrol cheaper by ₹ 12 per litre. [1]
Refer to the following table to get a clear idea about tax breakup at fuel’s price on November 2021 -
|
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 |
₹6.82 per litre |
|
VAT (Levied by the State Government) |
₹13.45 per litre {16% of (fuel price charged to dealers + excise duty + avg. dealer commission)} |
|
Retail selling price at Haryana |
₹97.52 per litre |
Our Union Government levies central excise duty on petrol. However, the state government determines VAT on petrol in Haryana. This is not just in one state but in all states across our country. This is why VAT varies in every state leading to various petrol prices throughout India.
The government of India lowered its excise duty by ₹5 per litre at the beginning of November. However, after reductions in VATs in several states, the central government announced a reduction of ₹10 per litre at the end of November.
Following are the several factors that affect petrol price in Haryana -
India imports most of its crude oil supply from the international market. The often changing price of crude oil influences fuel’s prices in domestic markets. As the demand and supply change in the global market for crude oil, its price changes.
Oil Marketing Companies collect and distribute the crude oil to the dealers. The price they charge for this is a crucial factor to determine petrol’s price in Haryana. The fee charged by the OMCs includes refining cost, freight charges etc. The current OMC cost is ₹8.88 per litre for petrol across our country.
Our government decides a commission for the fuel dealers. This commission covers the revenue, profit and costs of the petrol pump owners. This price, in addition to the base price of crude oil, affects the all-over price of petrol.
Central government imposes duties such as excise duties and road cess on petrol and diesel’s price. Whereas similar to all state governments, the Haryana Government imposes VAT on petrol in Haryana. Changes in these charges influence the price of petrol in Haryana.
Supply of petrol and diesel decreases if there is less number of refineries. This is because the process of refining crude oil becomes sloth. Conversely, demand goes higher than supply when there is an excessive rate of consumption. This increases demand and pulls up the price of petrol throughout our country, including Haryana.
This is another major factor to affect petrol’s price. India pays the price to purchase crude oil in USD. Therefore, a change in value of Indian Rupees against USD affects the domestic price of petrol.
VAT on petrol in Haryana is uniform throughout this state. But prices still may vary in different cities depending on different dealer’s commissions and other factors.
Now, you probably have a clear idea about petrol price and the factors influencing it. But you must keep in mind that this price may vary on the other day. It is due to varying taxes and VAT rates on petrol in Haryana.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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