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High petrol prices - 59% levies in Bangalore, where does it all go?

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[Promoting Transmogrifier's comment to a separate 'crowdsourcing' post - we need to know what is happening to the various taxes and cess that makes petrol so expensive for us. 59% of fuel price is levies, where is it all going today? Do share if you know.]

@ PublicAgenda, while conspiracy theorists make for good movie-making, it's time (like many here are suggesting) that we look at why we pay so much as in the way of levies (59%?) and much worse, get so little. Let's take two examples:

1. In one of the most capitalistic of societies, federal and state taxes, on average, are about 45.6c/gallon (for petrol) or 16.7% at today's price of unleaded petrol. What do you get for that? For 18.4c out of that (or 6-7%) you get 75,000 km of Interstate system on which you could cover 950km (that's the distance to Chennai... and back...and then back again) in 9.5hrs.

But let's take an example from Europe...where the push to reduce carbon reliancy is much greater...

2.  In the UK, 68% of the price of unleaded is attributed to the Hydrocarbon oil duty and VAT, but most of the Hydrocarbon oil duty goes to infrastructure projects (source)...projects that we often draw inspiration from.

Does anyone have actual numbers on the Karnataka state budget (I tried looking but it's hard to tease apart the actual income from sale of fuel) before "market middle-men" take all the glory? Make no mistake, I agree that there's a lot more to oil than meets the eye... but oil subsidies are a problem of our own making. I say we question not just why we have a subsidy but also what happens to our 59%?

[Find  original comment here]


idontspam's picture

Tax break up

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Entry tax is 5% on fuel while sales tax is 25% on petrol and 18% on diesel respectively. There is no entry tax for diesel. The government has put the onus on the Centre to reduce fuel rates, maintaining it had brought down sales tax on petrol from 28% to 25% and diesel from 20 to 18% within a month of its coming to power in 2008.

According to Acharya, taxes are the highest in Karnataka compared to New Delhi because of transportation costs, despite Mangalore having an oil refinery. "Though New Delhi has no refinery, it’s considered a zero transport place. However from Karnataka, transport equalization charge is collected for fuel being transported from Chennai and Cochin. The Mangalore refinery is not taken into account. If this is done, the government can sell petrol and diesel at a lower rate in at least eight to 10 districts," he added


This doesnt total up. The second half is interesting. Why do we have MP's from the state who dont solve these issues for us?

Transmogrifier's picture

Petrol (Revenue inflow)

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A quick breakup (for petrol) of the different levies/taxes etc the government collects as revenue. As ids notes, there's still a missing 3% in the state taxes portion. Didn't include a diesel chart since I'm missing info on central excise/taxes.

Now, we need to figure out the outflow of this revenue and then we can link the two together.


PS: Anyone know how the dealer commission figures into all this (i.e. how much?).


idontspam's picture

Dealer commission

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 The commission given to the dealer on every litre of petrol is about Rs 1.20


naveen_blr's picture


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But i would want to know why is the price difference in Karnataka?

Can somebody post the breakup or do we need to file an RTI? comment guidelines

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