The Cost Breakup
The Indian basket of Crude Oil is at about USD 100 today (NYMEX is at USD 90.32, Brent is at USD 107.4
Source:
Energy & Oil Prices: Natural Gas, Electricity and Oil - Bloomberg
and Indian basket is usually at 5-7% discount to Brent).
At todays exchange of Rs. 56 per USD (the worst ever!), this works out to Rs. 5600 per barrel, which is still 6% cheaper than the highest price of Rs. 5900 recorded in August 2008.
Lets us look closely at how this translates to cost per litre of petrol!
A barrel of Crude produces approx. 150 litres of Petrol or its equivalent. (This is a broad generalisation and depends on type of crude, efficiency of the refinery etc. but is a reasonably good estimate, based on expert inputs).
The total of all other costs involved in converting crude to Petrol which includes transport of crude and refined products, cost of refining, reasonable refining margin for the refinery, fuel used by the refinery, dealer commission, etc. is approx. USD 12, which works out to Rs. 672 per barrel.
Now, this totals up
to a final cost of petrol, at your nearest petrol bunk, at Rs. 42 per litre!
YES, it is a little less than Rs 42 per litre, shorn of all taxes! [(5600+672)/150].
This morphs to Rs. 77 81 per litre, adding taxes at different levels under various heads
Basic Excise duty, Additional Duty, Special Additional duty, Cess, Additional Cess and lastly, the exorbitant State Sales Tax adding up to Rs. 35-40 per litre of Petrol.
These are the taxes and duties that the Governments both centre and state happily splurge on populist policies with an aim of making every citizen a beggar of Govt. doles!
