Different Types of Taxes on Petrol in Delhi

Total tax imposed on the petrol prices is a combination of Central Excise Duty and Value Added Tax (VAT). After a drop in the excise duty of petrol, Delhi government slashed the VAT on petrol to 19.40% from 30%.

Here is the list of significant details regarding petrol tax in Delhi:

Note:

1. VAT levied by the state government is 19.40% of the sum of fuel price charged to the dealers, excise duty, and the average dealer commission.
2. The prices may change periodically depending upon the fluctuation in taxes.

Petrol Prices Without Tax

Who imposes the petrol tax in Delhi

The combination of excise duty and VAT along with other charges comprises the final price of petrol. Central government imposes the excise duty, while the VAT is added by the state government. 

There has been a significant drop in petrol prices due to the reduction of excise duty, though the Delhi dealer's association further demands for a reduced VAT to increase the sales. 

What are the factors that influence the petrol tax in Delhi

The following are the factors that affect the petrol tax in Delhi:

1. Demand and supply of fuel: Depending upon global fuel demand and supply, petrol prices fluctuate. The price increases against lower supply of petrol, if the demand is on the higher side.
2. Central excise duty: This is a predefined amount imposed on petrol that remains stable irrespective of the fluctuation in the global crude oil demand.
3. Dealer's cost: The Oil Marketing Companies (OMCs)  like IOCL , BPCL etc charges dealer cost to the dealers that include refining cost, freight charges, and charges (if applicable).
4. Dealer's commission: Petrol pumps are paid commissions by the OMCs that include income, profit, and other charges.
5. Crude oil price: Depending upon the future oil reserves, global supply and demand, and other internal issues, the crude oil prices vary periodically which impacts the petrol tax in Delhi.