Total tax on petrol down to 50%, diesel to 40% after duty cuts

Retail price of petrol and diesel is decided after adding central excise, commission paid to dealers and value-added tax (VAT) to basic oil prices

The total incidence of taxes on petrol has come down to 50% and that on diesel to 40% following a reduction in excise duty by the Central Government, and by a slightly higher proportion in States that have also cut local sales tax or VAT on the fuel.

The retail price of petrol and diesel is decided after adding central excise, commission paid to dealers and value-added tax (VAT) to basic oil prices. The basic oil price is the prevailing international benchmark rate plus freight.

On November 1, prior to the duty cuts, central excise of ₹32.90 a litre and VAT of 30% in Delhi made up for 54% of the retail selling price of diesel, according to price build-up of the fuel available from State-owned fuel retailers.