The price of crude oil in the international market is $ 65 per barrel. This comes out to be Rs. 4154 per barrel.
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| Petrol Pump Wikimedia Commons by Abhijeet |
A barrel contains 159 liters of oil. So the price of crude oil becomes Rs.26 per liter.
After refinery charges, transportation expenses and entry taxes the price of petrol becomes Rs.33 and that of diesel becomes Rs 35.
Then the Indian government increases the prices of petrol and diesel by imposing Rs. 19 and Rs. 15 as a production tax respectively. Now the price of petrol becomes Rs. 52 and that of diesel shoots up to Rs. 50.
Adding the commission of the proprietor of petrol/diesel sales outlet the petrol and diesel price becomes Rs. 56 and Rs. 52 respectively.
Then again the vat tax @ 27% and 16.75 % is added to petrol and diesel. Thereafter the prices of petrol and diesel start skyrocketing at Rs. 72 and Rs. 60 respectively.
The addition of this tax concludes the process of fixing the final price of petrol and diesel in India. This comes out to be more than double the actual price.
