Pay through Nose

A litre petrol in India would have cost us 25-30 Rupees, have been there no tax implications i.e. if we consider basic cost of petrol as 25 Indian rupees then 35 rupees approximately are the taxes and duties imposed on the poor fuel because of which it is available @ 60 Rupees a litre in retail market.


Even today the Base price of petrol is between 25-30 rupees added to which are taxes like Excise duty, Education Tax, Dealer commission, VAT, Crude Oil Custom duty, Petrol Custom duty etc, Which means we are paying effectively for 2 litres of petrol and getting 1 instead. You might have heard about buy 2 get 1 free but this one is strange and is one of its kind pay for 2 get only 1

With a recent hike of 3 rupees, the poor petrol is now costing @ 60 rupees in some of the metros; well it’s not shocking but was anticipated since the day government decided not to regulate the pricing, which implicitly gives authority to the oil marketing companies to decide upon the pricing at which the products can be made available in the market. Petrol got orphan letting marketing companies to drive it. Strange…!!! “Driving force getting driven”

Since last few weeks the entire machinery was struggling to tame the inflation to a single digit figure, Kudos!!! They achieved it recently….!!!. But the recent hike will definitely push it back to two figures. Petrol is not singled out from oil based products; instead oil marketing companies are eyeing to hike prices for Kerosene, diesel and LPG. Now as all these components have weightage in whole price index they will push the inflation.

Petrol has a weight of 0.88 per cent, while diesel has a weightage of over two per cent in the Wholesale Price Index, on the basis of which inflation is calculated and if the prices of petrol and diesel rises, inflation is bound to rise, LPG cylinder would add addition 0.2-0.3 per cent to the kitty, taking all together we can assume an increase of 1% approx in the inflation figures.

Protest, special comments and concern on the price hike has started pouring in and will gain some more momentum in a day or two once people start feeling the pinch of price hike.

I was wondering what will be the pricing of petrol once the crude oil touch the pre meltdown level i.e. 150 $ a barrel, definitely you can expect petrol costing @ 500 rupees a litre, Pray to God; it should not happen, that’s what we can do as individuals at this point of time

Image source: indianbuzzblog.blogspot.com