Petrol Tax in Kerala: Different Types of Taxes Applicable on Petrol

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

As on 21st October 2022, the price of petroleum per litre is ₹104.46 in Kerala. Earlier the Central government had announced a cut of ₹ 5 per litre on central excise duty on petrol, urging states to do the same last year. However, the Kerala government refused to lower the petrol tax. On that note, let’s look at the petrol tax in Kerala.

What Is the Petrol Tax Levied in Kerala?

Although the Centre slashed excise duty on petrol recently, the Kerala State Government has no plans to cut down on sales tax, most likely because it hadn’t hiked fuel tax in the last 6 years. Regardless, the petrol price tax split up in Kerala has been shown below -

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	₹3.66 per litre
VAT (Levied by the State Government)	₹24.93 per litre {30.8% of (fuel price charged to dealers + excise duty + avg. dealer commission)}
Retail selling price at Kerala	₹105.84 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 Kerala)

Who Levies Petrol Tax in Kerala?

There are 2 components of the petrol tax in Kerala. The Central Government of India imposes a central excise duty while the state government charges sales tax, additional sales tax and cess. The combination of these taxes regulates petrol price and tax in Kerala. This price is set every day at 6 am.

What Are the Factors Affecting Petrol Tax in Kerala?

Here are some factors that affect the petrol price in Kerala. They are -

1. Price of Crude Oil

Price of crude oil affects the price of petrol in Kerala and in India. Demand and supply and international politics are some of the factors that affect the price of crude oil.

2. Central Excise Duty

The Indian Central Government levies this duty which a consumer pays.

3. Cost for Dealers

Oil Marketing Companies distribute petrol. Consequently, they ask the price to dealers. This cost paid by dealers is then passed to consumers, impacting the petrol price.

4. Dealer’s Commission

Oil Marketing Companies pay a sum such as a commission to petrol pump owners. This also plays a part in petroleum price in Kerala.

5. State’s Sales Tax

Every state levies a sales tax, Kerala is no different, as the cess and revenue create an income source for the government.

Is the Petrol Tax Same in All Places in Kerala?

Yes, the petrol tax is the same in all places in Kerala. However, individuals may observe different petrol prices across petrol pumps due to varying dealer’s commissions applicable besides tax.

In conclusion, that was all about the petrol tax in Kerala. However, petrol prices are not going to be slashed anytime soon as per the government diktat.

Frequently Asked Questions

✓ Does petrol fall under GST?

Petrol does not fall under the GST regime.

✓ How much does Kerala State earn on 1 litre of petrol through tax?

Kerala State earns around ₹ 26 on 1 litre of petrol. Petrol taxes are subject to change. So, readers are advised to keep an eye on the same.