Lok Sabha Question No. 1574 (UNSTARRED), answered on 2025-02-13
Subject: Disparity in Petroleum Product Prices and Taxation
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Shri Manickam Tagore B

## LOK SABHA UNSTARRED QUESTION NO. 1574 TO BE ANSWERED ON 13 FEBRUARY, 2025

## Disparity in Petroleum Product Prices and Taxation

1574. Shri Manickam Tagore B:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether it is true that domestic petrol and diesel prices have not decreased proportionally to the recent decline in global crude oil prices which have fallen by approximately 30 per cent during the last six months and if so, the reasons therefor;
- (b) the current percentage of excise duty (Rs. 32.9 per litre on petrol and Rs. 31.8 per litre on diesel) and the Value Added Tax (VAT) levied by individual States (ranging from 15 per cent to 35 per cent) on petrol and diesel along with the manner in which this contributes to the disparity between global and domestic fuel prices;
- (c) the measures taken/being taken by the Government to reduce excise duties and State taxes on petroleum products, which currently constitute over 60 per cent of the retail price of fuel, to reflect the global price decline and provide relief to the consumers; and
- (d) whether the Government can clarify its stance on the political and economic implications of lowering fuel prices, particularly during election periods and if so, the details thereof along with the manner in which the Government proposes to balance it with consumer welfare?

## ANSWER

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũालय मŐ राǛ मंũी ( ŵी सुरे श गोपी )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI SURESH GOPI)

- (a) to (d): Prices  of  Petrol  and  Diesel  are  market  determined  and  Public  Sector  Oil Marketing  Companies  (OMCs)  take  decisions  on  their  pricing  based  on  various  factors, which include crude oil prices, international  product prices, exchange  rates,  tax  structures, inland freight, insurance etc. India, the world's largest democracy, conducts elections and byelections through democratic and constitutional processes. The prices of petroleum products like petrol, diesel are not linked to election schedules.

Currently, an excise duty of Rs. 19.90 per litre and Rs. 15.80 per litre is levied on petrol and diesel  respectively.  The  VAT  levied  by  various  State  Governments  on  Petrol  and  Diesel varies from state to state and details are given at Annexure. The share of taxes and duties in Retail Selling Prices of Petrol and Diesel at Delhi as on 07.02.2025 are given below:

| Share of taxes in Petrol and Diesel RSP as on 07.02.2025   | Share of taxes in Petrol and Diesel RSP as on 07.02.2025   | Share of taxes in Petrol and Diesel RSP as on 07.02.2025   | Share of taxes in Petrol and Diesel RSP as on 07.02.2025   | Share of taxes in Petrol and Diesel RSP as on 07.02.2025   |
|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|
|                                                            | Petrol                                                     | Petrol                                                     | Diesel                                                     | Diesel                                                     |
| Elements                                                   | Rs./ Ltr.                                                  | %in RSP                                                    | Rs./ Ltr.                                                  | %in RSP                                                    |
| Price before taxes and dealer commission                   | 54.13                                                      | 57.11%                                                     | 54.94                                                      | 62.67%                                                     |
| Customs duty                                               | 0.95                                                       |                                                            | 1.07                                                       |                                                            |
| Excise Duty                                                | 19.90                                                      |                                                            | 15.80                                                      |                                                            |
| Total Central Taxes                                        | 20.85                                                      | 22.00%                                                     | 16.87                                                      | 19.25%                                                     |

| Price Charged to customer - Depot Price   |   74.98 |         |   71.81 |         |
|-------------------------------------------|---------|---------|---------|---------|
| VAT (Including VAT on dealer commission)  |   15.4  |         |   12.83 |         |
| Total State Taxes                         |   15.4  | 16.25%  |   12.83 | 14.63%  |
| Total Taxes                               |   36.25 | 38.25%  |   29.7  | 33.88%  |
| Dealer Commission                         |    4.39 | 4.64%   |    3.02 | 3.45%   |
| RSP per litre (Rounded up)                |   94.77 | 100.00% |   87.67 | 100.00% |

Source: Petroleum Planning and Analysis Cell (PPAC)

Domestically, Petrol and Diesel prices have come down to Rs. 94.77 and Rs. 87.67 per litre respectively (Delhi prices) as a result of various steps taken by Government and PSU OMCs, Central Excise duty was reduced by the Central Government by a total of Rs. 13/litre and Rs. 16/litre on petrol and diesel respectively in two tranches in November 2021 and May 2022, which was fully passed on to consumers. Some State Governments also reduced state VAT rates to provide relief to citizens. In March, 2024, OMCs reduced the retail prices of petrol and diesel by Rs. 2 per litre each.

PSU OMCs have recently carried out an intra-state freight rationalisation. This has benefitted consumers located at remote areas, far from Petroleum Oil & Lubricants (POL) Depots in the form of reduced Petrol and Diesel prices in remote parts within the states. This initiative has also  reduced  the  difference  between  the  maximum  and  minimum  retail  prices  of  Petrol  or Diesel within a state.

Government also took several other steps to insulate common citizens from high international prices,  which  included  diversifying  the  crude  import  basket,  invoking  the  provisions  of Universal  Service  Obligation  to  ensure  availability  of  petrol  &  diesel  in  domestic  market, increasing the blending of ethanol in petrol, etc.

India  has  been  the  only  major economy  in  the  world  where the prices  of  petrol  and  diesel have  come  down  in  recent  years.  Changes  in  prices  of  petrol  and  diesel  in  some  major economies between November 2021 and December 2024 are as under:

|               | %age Change in Prices between Nov-21 and Dec-24   | %age Change in Prices between Nov-21 and Dec-24   |
|---------------|---------------------------------------------------|---------------------------------------------------|
| Country       | Petrol                                            | Diesel                                            |
| India (Delhi) | -13.60%                                           | -10.92%                                           |
| France        | 11.07%                                            | 10.99%                                            |
| Germany       | 3.40%                                             | 6.86%                                             |
| Italy         | 5.21%                                             | 7.38%                                             |
| Spain         | 5.14%                                             | 8.58%                                             |
| UK            | 0.17%                                             | 2.22%                                             |
| Canada        | 5.55%                                             | 15.06%                                            |
| USA           | 1.36%                                             | 6.90%                                             |

Source: Petroleum Planning and Analysis Cell (PPAC)

Changes in prices  of petrol  and  diesel  in  some  neighboring  economies  between  November 2021 and December 2024

|              | %age Change in Prices between Nov-21 and Dec-24   | %age Change in Prices between Nov-21 and Dec-24   |
|--------------|---------------------------------------------------|---------------------------------------------------|
| Country      | Petrol                                            | Diesel                                            |
| India(Delhi) | -13.60%                                           | -10.92%                                           |
| Pakistan     | 27.90%                                            | 33.37%                                            |
| Bangladesh   | 12.62%                                            | 29.31%                                            |
| SriLanka     | 54.29%                                            | 98.59%                                            |
| Nepal        | 20.06%                                            | 31.64%                                            |

Source: Petroleum Planning and Analysis Cell (PPAC)

Annexure referred to in reply to Lok Sabha Unstarred Question No. 1574 asked by Shri Manickam Tagore B to be answered on 13.02.2025 regarding 'Disparity in Petroleum Product Prices and Taxation'.

Details of VAT /Sales tax on petrol and diesel as on 07.02.2025

| State/UT                                 | Petrol                                                                                            | Diesel                                                                                                                       |
|------------------------------------------|---------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|
| Andaman &Nicobar Islands                 | 1%                                                                                                | 1%                                                                                                                           |
| Andhra Pradesh                           | 31% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess and Vat thereon                         | 22.25% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess and Vat thereon                                                 |
| Arunachal Pradesh                        | 14.50%                                                                                            | 7.00%                                                                                                                        |
| Assam                                    | 24.77% or Rs.18.80 per litre whichever is higher                                                  | 22.19% OR Rs. 14.60 per litre whichever is higher Rebate of Rs. 1.50 per litre subject to minimum tax of Rs. 14.60 per litre |
| Bihar                                    | 23.58% or Rs 16.65/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax)          | 16.37% or Rs 12.33/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax)                                     |
| Chandigarh                               | Rs.10/KL cess +15.24% or Rs.12.42/Litre whichever is higher                                       | Rs.10/KL cess + 6.66% or Rs.5.07/Litre whichever is higher                                                                   |
| Chhattisgarh                             | 24% VAT + Rs.2/litre VAT                                                                          | 23% VAT + Rs.1/litre VAT                                                                                                     |
| Dadra and Nagar Haveli and Daman and Diu | 12.75% VAT                                                                                        | 13.50% VAT                                                                                                                   |
| Delhi                                    | 19.40% VAT                                                                                        | Rs.250/KL air ambience charges + 16.75% VAT                                                                                  |
| Goa                                      | 21.5% VAT + 0.5% Green cess                                                                       | 17.5% VAT + 0.5% Green cess                                                                                                  |
| Gujarat                                  | 13.7% VAT+ 4% Cess on Town Rate &VAT                                                              | 14.9% VAT + 4 %Cess on Town Rate & VAT                                                                                       |
| Haryana                                  | 18.20% or Rs.14.50/litre whichever is higher as VAT+5% additional tax on VAT                      | 16.00% VAT or Rs.11.86/litre whichever is higher as VAT+5% additional tax on VAT                                             |
| Himachal Pradesh                         | 17.5% or Rs 13.50/Litre- whichever is higher                                                      | 13.90% or Rs 10.40/Litre- whichever is higher                                                                                |
| Jammu &Kashmir                           | 24% MST+ Rs.2/Litre employment cess, Rebate of Rs.4.50/Litre                                      | 16% MST+ Rs.1.00/Litre employment cess , Rebate of Rs.6.50/Litre                                                             |
| Jharkhand                                | 22% on the sale price or Rs. 17.00 per litre , which ever is higher + Cess of Rs 1.00 per Ltr     | 22% on the sale price or Rs. 12.50 per litre , which ever is higher + Cess of Rs 1.00 per Ltr                                |
| Karnataka                                | 29.84% sales tax                                                                                  | 18.44% sales tax                                                                                                             |
| Kerala                                   | 30.08% sales tax+ Rs.1/litre additional sales tax + 1% cess , Social security cess Rs.2 per litre | 22.76% sales tax+ Rs.1/litre additional sales tax + 1% cess , Social security cess Rs.2 per litre                            |
| Ladakh                                   | 15% MST+ Rs.5/Litre employment cess, Reduction of Rs.2.5/Litre                                    | 6% MST+ Rs.1/Litre employment cess , Reduction of Rs.0.50/Litre                                                              |
| Lakshadweep                              | 10% VAT                                                                                           | 10% VAT                                                                                                                      |
| Madhya Pradesh                           | 29 %VAT + Rs.2.5/litre                                                                            | 19% VAT+ Rs.1.5/litre VAT+1% Cess                                                                                            |

|                                           | VAT+1%Cess                                                                                                                                                                                     |                                                                                                                                                                                                     |
|-------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Maharashtra - Mumbai, Thane & Navi Mumbai | 25% VAT+ Rs.5.12/Litre additional tax                                                                                                                                                          | 21% VAT                                                                                                                                                                                             |
| Maharashtra (Rest of State)               | 25% VAT+ Rs.5.12/Litre additional tax                                                                                                                                                          | 21% VAT                                                                                                                                                                                             |
| Manipur                                   | 25% VAT                                                                                                                                                                                        | 13.5% VAT                                                                                                                                                                                           |
| Meghalaya                                 | 13.50% or Rs.13.50/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge)                                                                                                              | 5% or Rs. 9.50/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge)                                                                                                                       |
| Mizoram                                   | 18%, Social Infrastructure and Services Cess Rs. 2000/KL, Road Maintenance Cess Rs 2000/KL                                                                                                     | 10%, Social Infrastructure and Services Cess Rs.2000/KL, Road Maintenance Cess Rs.2000/KL                                                                                                           |
| Nagaland                                  | 21.75% VAT or Rs. 16.94/litre whichever is higher                                                                                                                                              | 17.20% VAT or Rs. 12.83/litre whichever is higher                                                                                                                                                   |
| Odisha                                    | 28% VAT                                                                                                                                                                                        | 24% VAT                                                                                                                                                                                             |
| Puducherry                                | 16.98% VAT                                                                                                                                                                                     | 11.22% VAT                                                                                                                                                                                          |
| Punjab                                    | Rs.2050/KL (cess)+ Rs.0.10 per Litre (Urban Transport Fund) + 0.25 per Litre (Special Infrastructure Development Fee)+16.58% VAT plus 10% additional tax or Rs.14.93/Litre whichever is higher | Rs.1050/KL (cess) + Rs.0.10 per Litre (Urban Transport Fund) +0.25 per Litre (Special Infrastructure Development Fee) + 13.1% VAT plus 10% additional tax and or Rs.10.94/Litre whichever is higher |
| Rajasthan                                 | 29.04% VAT+Rs.1500/KL road development cess                                                                                                                                                    | 17.30% VAT+ Rs.1750/KL road development cess                                                                                                                                                        |
| Sikkim                                    | 20% VAT+ Rs.4000/KL cess                                                                                                                                                                       | 10% VAT + Rs.3500/KL cess                                                                                                                                                                           |
| Tamil Nadu                                | 13% + Rs.11.52 per litre                                                                                                                                                                       | 11% + Rs.9.62 per litre                                                                                                                                                                             |
| Telangana                                 | 35.20% VAT                                                                                                                                                                                     | 27% VAT                                                                                                                                                                                             |
| Tripura                                   | 17.50% VAT+ 3% Tripura Road Development Cess                                                                                                                                                   | 10.00% VAT+ 3% Tripura Road Development Cess                                                                                                                                                        |
| Uttar Pradesh                             | 19.36% or Rs.14.85/Litre whichever is higher                                                                                                                                                   | 17.08% or Rs.10.41/Litre whichever is higher                                                                                                                                                        |
| Uttarakhand                               | 16.97% or Rs. 13.14 Per Ltr whichever is greater                                                                                                                                               | 17.15% or Rs. 10.41 Per Ltr whichever is greater                                                                                                                                                    |
| West Bengal                               | 25% or Rs.13.12/litre whichever is higher as sales tax+ Rs.1000/KL cess (20% Additional tax on VAT as irrecoverable tax)                                                                       | 17% or Rs.7.70/litre whichever is higher as sales tax + Rs.1000/KL cess (20% Additional tax on VAT as irrecoverable tax)                                                                            |

Source: Petroleum Planning and Analysis Cell (PPAC)