Why Petrol prices are High in India?

16. May 2011 07:07

If the cost price of petrol per litre is Rs 58.90, following is the break up of cost calculated by the Indian government.

• Basic Price: Rs 28.93
• Excise duty: Rs 14.35
• Education Tax: Rs 0.43
• Dealer commission: Rs 1.05
• VAT: Rs 5.5
• Crude Oil Custom duty: Rs 1.1
• Petrol Custom: Rs 1.54
• Transportation Charge: Rs 6.00
• Total price: Rs 58.90

Based on the above calculation the price of crude is only around 36-40% of the total price that we pay at the pumps.

Government Basic oil Price calculation –

Considering that the current price of crude oil is \$107 per barell,

Cost of per barrel in RS will be 107*45.40 (\$1 = Rs45.40) = 4858.

One barell consists of approximately 160 litres.

So Price of crude oil per litre will be 4858/160 = Rs.30.36.

Now Indian Oil Company loses 1.43 Rs per litre + cost of transportation of crude oil and refining the price.

If the oil companies are at a loss, then how is it that they declare high dividends for their share holders?

In the year 2008-2009 Hindustan petroleum company had a net profit of Rs: 574.5 crores, similarly in 2009-10 Indian oil had a profit of Rs: 5556.77 crores and Bharat petroleum had a profit of Rs; 5015.5 crores. If these companies had incurred a loss, then where from, they got this profit?

IOC, gifted their current employees and retired employees gold coins.  So then, how can a company that is projected to suffer losses of several crores per day give such large gifts?

The government is just putting this picture of loss. Its true that these 4 products, namely petrol, diesel, kerosene and LPG are given on subsidy and the company does suffer a loss on them. But these companies produce other products and by products of the refining process such benzene and toluene etc, which makes huge profits for them. Hence, the company on the overall is not at a loss but make profits.

Moreover, the governement’s taxes on fuel accounts for more than 50% of the cost. The government is making a fool of all of us.

Petrol prices in other countries

America           Rs 43.7 per litre

China               Rs 47.5 per litre

Pakistan           Rs 43.29 per litre

Russia              Rs 41.96 per litre

Malaysia           Rs 26.78 per litre

Venezuela         Rs 0.71 per litre

India                 Rs 65 per litre

World market crude oil is not the reason for this. It’s all gain for Indian Government and private oil companies?

Political

Rajan Vasu Nair

I have written thousands of letters to different government officials of different departments. But I have received reply only from few departments. But no action has been taken by any of department. This is the situation of our country that no body is serious about their job. Whenever I complaint against someone to a government official I start getting threats call from the person/department against whom I have complain. Corruption has gone deep in to the system that it’s very difficult to remove.