Home / News / India /  How much tax you pay on petrol and diesel

The issue of government taxes on petrol and diesel is again in the spotlight after the central government on Saturday hiked excise duty on petrol and diesel by a steep 3 per litre each. Earlier, a few states like Maharashtra and Karnataka had announced that they would hike VAT or value added tax. In India, the price of petrol and diesel you pay at the pump is dependent on international product prices and other market conditions. Petrol and diesel do not come under the purview of goods and services tax (GST).

Other factors in retail price of petrol and diesel include excise duty, VAT, BS IV premium, marketing cost and margins, dealers commission etc.

Based on the today's price of petrol in Delhi of 69.59 per litre, the base price of the fuel was 27.96 per litre, according to Indian Oil website. Including freight of 0.32 per litre, price charged to dealers (excluding excise duty and VAT) was 28.28 per litre.

Add to it excise duty of 22.98 per litre and dealer commission, which averaged 3.54 per litre. On this, further add VAT or value added tax (including VAT on dealer commission) of 14.79 per litre. Then comes the final retail selling price of petrol of 69.59 a litre in Delhi.

So if you add excise duty and state-levied VAT on petrol, the total tax incidence comes to 54% in Delhi.


Let us consider today's diesel retail selling price of 62.29 per litre in Delhi. According to Indian Oil website, the base price was 31.49 per litre. Add to it freight charges of 0.29 litre, the price charged to dealers (excluding Excise Duty and VAT) comes to 31.78 per litre. Then add excise duty of 18.83 per litre, dealer commission (average) 2.49 litre and VAT (including VAT on Dealer Commission) 9.19 litre, the final retail selling price in Delhi comes to about 62.29 per litre.

So if you add excise duty and state-levied VAT on diesel, the total tax incidence comes to about 44% in Delhi.

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