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    All About Petrol Tax in West Bengal

    petrol tax in west bengal
    Source: economictimes

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

    The recent economic downturn due to the COVID pandemic is a significant cause for a crunch in cash reserves of the Indian Government. This has an impact on fuel prices in India as well. Petrol prices have skyrocketed recently, adding to the woes of daily commuters. Currently, petrol prices in Bengal have breached the ₹100 mark.

    Now, a petrol tax in West Bengal is a significant component of the final price of fuel. Here, let's discuss tax types and factors affecting petrol prices in West Bengal.

    Team Digit

    What is the Petrol Tax Levied in West Bengal?

     

    The total tax on petrol in West Bengal is a combination of Central Excise Duty and VAT. Now, the Central Government levies an excise duty while states levy VAT. After that, the resultant price is what we pay for petrol or diesel.

    Recently, the excise duty was slashed in October 2022. However, there hasn’t been any revision in West Bengal’s state-imposed VAT on petrol yet.

    Here, we have mentioned the approximate petrol tax in West Bengal along with this latest

    Elements

    Effective as of 21st October (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

    ₹4.10 per litre

    VAT (Levied by the State Government)

    ₹19.69 per litre {24.2% of (fuel price charged to dealers + excise duty + avg. dealer commission)}

    Others (Commission charged to pump owners, etc.)

    ₹5.78 per litre

    Retail selling price at West Bengal

    ₹106.82 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 West Bengal)

    Who Levies Petrol Tax in West Bengal?

    The price of petrol in India has skyrocketed in recent times.

    But who levies a tax on petrol in West Bengal?

    Two types of taxes get levied; they are - VAT and Excise Duty. The final price is the sum of these two taxes along with other charges like a dealer’s commission.

    Now, who charges what?

    Well, the central excise duty comes under a central government. In contrast, state governments impose a sales tax or value-added tax. Now, excise duty (₹ 19.90) is constant across all states, while the VAT varies.

    The global health crisis has hit every state of India. West Bengal, too, is not beyond its grasp. This state’s fiscal deficit was at 3.86% of GSDP. West Bengal’s revenue deficit and debt to GDP is 2.54% and 35.54% , respectively, in FY21.

    All these have made both the state and central government not reduce petrol taxes in West Bengal so far. However, recently, the centre has reduced excise duty by ₹5 on petrol. This has triggered many other states to reduce VAT on petrol prices. But, the Bengal Government refused to cut down VAT as of now.

    What Are the Factors Affecting the Petrol Tax in West Bengal?

    Following are the factors on which petrol price in West Bengal depends.

    1. Crude Oil Price

    The price of crude oil varies globally. When there is a change in the price of crude oil, it also affects the diesel and petrol prices in India. Here, we have mentioned the factors that affect the prices of crude oil -

    • Crude oil supply and demand
    • International politics
    • Future oil reserves and supply

    2. Dealer’s Commission

    The OMCs pay a certain commission to various petrol pump owners. These commissions cover their income, profits, and various other costs. Thus, a dealer’s commission impacts the overall petrol price in West Bengal.

    3. Central Excise Duty

    The centre charges the excise duty on diesel and petrol. The excise duty is a predefined amount and does not vary like VAT. It does not get impacted by the change in prices of crude oil globally.

    4. Dealer’s Cost

    Various oil marketing companies or OMCs distribute crude oil in the market. These organisations charge a specific price to the dealers. This price depends on factors like - freight charges, refining cost, etc.

    5. State’s Sales Tax

    The West Bengal Government’s tax on petrol is the value-added tax that the government charges on diesel and petrol. This state’s sales tax gets computed on the base price + excise duty. The state of West Bengal considers the crude oil prices, dealer’s commission, and more to decide on the petrol tax in West Bengal.

    6. Fuel’s Demand and Supply

    Post-COVID times witnessed a surge in automobile sales. With an increased demand for automobiles, the need for petrol and diesel has also increased. Due to this growing demand for petrol, often the supply of crude oil cannot match up to it. This results in an imbalance in the supply and demand of fuel. Thus, fuel price increases due to an increased demand against lower supply of petrol.

    Also, crude oil needs processing. Hence, crude oil is sent to the refineries for its processing. If there is a lesser number of refineries, it will lead to a fall in fuel supply. As a result, it will further lead to an increase in the price of fuel.

    7. Value of Indian Currency Against US Dollar

    Most global business and financial transactions happen in American currency, i.e., US Dollars (USD). Also, various transactions related to crude oil are done in USD. Thus, if there is any change in the dollar value it will also affect the value of Indian rupees (INR). For example, if the value of the dollar shoots higher, the cost of buying crude oil will also move upwards. Hence, it will lead to an increase in crude oil’s final price.

    Is the Petrol Tax Same Across All Cities in West Bengal?

    Yes, the VAT charged on oil prices is the same across all cities of West Bengal. Hence, you will have to pay the same petrol tax in West Bengal.

    However, the final fuel price can vary from place to place. Also, the petrol price is rising continuously. Hence, keep track of it to know the latest updates.

    Frequently Asked Questions

    How to check the current price of petrol in West Bengal?

    By using the mobile apps of Shell or Indian Oil or Bharat Petroleum, or Hindustan Petroleum Corporation, you can check the petrol prices in West Bengal. A revised rate will be made applicable after updating the fuel price at 6 am.

    By using the mobile apps of Shell or Indian Oil or Bharat Petroleum, or Hindustan Petroleum Corporation, you can check the petrol prices in West Bengal. A revised rate will be made applicable after updating the fuel price at 6 am.

    Please try one more time!

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    Important Articles about Petrol Tax in India

    Excise Duty on Petrol and Diesel in India

    Taxes on Petrol and Diesel in India

    Petrol Tax in Karnataka

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    Petrol Tax in West Bengal

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    Author: Team Digit

    Last updated: 20-05-2025

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