India’s fuel price is higher than neighbouring countries


Fuel prices continued their record-breaking run on Tuesday, as petrol are being sold Rs 81.36 a litre in Dehradun and Rs 87.39 in Mumbai. Do you know why fuel prices are higher in India if we compare with our neighbouring countriews? As we aware that neighbouring states like UP, Uttarakhand and Bihar people are consistently crossing international border of Nepal to fill their tank or bring fuel from there intermittently.

The taxes that you pay on petrol and diesel nearly double its retail price. As of today, the Indian Oil Corporation, one of the largest oil retailers, charges Rs 39.21 a litre to dealers excluding VAT and excise to dealers but what you end up paying is nearly Rs 80 a litre.


VAT on petrol and diesel varies from state to state. Maharashtra government levies the highest VAT on petrol and diesel at 39.12% and 24.78% respectively in Mumbai. However, for rest of the Maharashtra, it is 38.11% for petrol and 21.89 for diesel. VAT on petrol is 35.12% in Punjab, 35.77% in Andhra Pradesh, , 35.78% in Madhya Pradesh and 27.15 % in Uttarakhand.

Dealer commission

In August 2017, state oil companies had increased the commission for petrol pump dealers by up to 55% under a revised formula that accounts for higher staff wages and, for the first time, the return on investment in land used for the filling station. The commission varies a little with the location of fuel pumps. For petrol, it is between Rs 3 and Rs 3.65 per litre. For diesel, it is between Rs 2 and Rs 2.62 per litre.

Retail price

After adding excise duty, dealer commission and VAT, the retail selling price of the petrol gets nearly doubled. Now Narendra Modi led NDA regime has ruled out excise duty cut on petrol and diesel to cushion the sky-rocekting prices. They believe the current account deficit will overshoot the target and it cannot disturb fiscal math by cutting excise duty on petrol and diesel. They said that the government can’t control price rise.

The excise duty on petrol was increased by by Rs 11.77 a litre and that on diesel by 13.47 a litre between November 2014 and January 2016 by the central government. Later, in October last year, excise duty was marginally cut by Rs 2 a litre.

Ironically, in neighbouring countries petrol price is much cheaper than here. For instance, Rs 57.83 in Pakistan, Rs 64.12 in Srilanka Rs 64.12, Rs 68.30 in Nepal and Rs 73.06 in Bangladesh.

One comment

  1. please date your statistics. R there countries where petrol prices are higher than in India? List them too instead of one-sided article.


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