who decides petrol price in india | Tax Calculation | Modi | BJP | India | Congress

Who decides the Cost of Petrol Price ?
Once Dynamic Fuel pricing was deployed, it gradually increases the amount frequently without any deduction on the rate. Once the start of this method petrol price was around 
Rs 61 - Rs 63 and now we are at the Peak were Indian History never seen this before even the One Barrel of Crude Oil Costs 

110 Dollars. One Positive move is, it makes all of us to think one thing, Who decides the Cost of Petrol ? 
Come let's see. I have constructed this article Very Simple to Understand for every Petrol and Diesel Users.

Calculation of Petrol and Diesel Cost
Retail selling price of petrol = Cost price of Crude oil  +
                                                 OMC costs + Central Excise Duty                                                      + VAT

I have Calculated it for Petrol and there is no difference in Diesel calculation where only the Tax percentage differs for Diesel.

Crude Oil Calculation
We all heard about the word called Barrel oftenly from Politicians, the cost of one Barrel of Crude oil rate is increased, so we are not the responsible for Petrol hikes, we cant control International Market hikes will be the Politicians reply whoever rules us.
But this is absolutely rubbish statemets, first I'll explain what is One Barrel of Crude Oil. 

One Barrel of Crude Oil = 159 litres of Crude Oil.

So i made you clear about What is One Barrel Of Crude Oil.
The Maximum hike of Crude oil is 111 Dollars which is way back in NDA peroid i.e Congress ruling peroid and they faced Economic crises too in between their peroid of ruling. Amidst of all the Petrol prize have not gone as we are facing now. 

Next, now coming to Current price of One Barrel of Crude oil is 79 Dollars and the INR aganist Dollar is i.e our Indian Rupee weightage to One Dollar is nearly 72 Rupees.
1 Dollar = 72 rupees

So INR aganist One Dollar is 72 * One Barrel Price 79 Dollars =
Totally Rs 5688 is One Barrel of Crude Oil(159 litre) in Indian Rupees.
Therefore,
One Barrel in Dollar is 79
One Barrel in Indian Currency is Rs 5688

Then One Litre of Crude Oil in Indian Currency is calculated by (One Barrel amount in Indian Currency) 5688 / (One Barrel = 159 litres) 159 = Rs 35.77 is Cost of Per Litre

Thereby we found out the cost of Per litre of Petrol which is is not too high as we compare now. Rupees 35.77 is the actual cost of petrol.

One Litre of Petrol = Rs 35.77 (approx)

OMC costs ( Oil Marketing Companies )
OMC is nothing but Oil Marketing Companies and OMC costs means, OMC Companies charging for their works includes 
refining Process to extract the product we need, 
Transportation expenses from carrying one place to another,
freight expenses i.e Amount of Goods we transport,
Entry Taxes like if a truck filled with petrol travelling from Delhi to Chennai to Fulfill the certain amount of need of bunk, they have to come across different tol gates with different costs in National Highways. As it come across these process so our government charges in the Name of OMC Costs as for the above mentioned processes. This may be acceptable charge, but this is too much to pay for consumers.



VAT Tax by State Government
Value Added Tax is shortly called as VAT deployed by State Government to rise his funds on various departments. Tax Percentage will be varied for all States. As on 4 October 2017, the state VAT imposed on petrol in Tamil Nadu was 25%.The last Updated tax revision on Oil price in Tamil Nadu is happened just a year before in March 2017. Increasing the VAT tax on petrol from 27% to 34% which is the major reason for hike on petrol Price in Tamil Nadu and its heavy load pushed on the shoulders of Consumers because of their inexperience in Management. With the revised tax rate, diesel in the state became costlier by Rs.1.70/Lt and petrol by Rs.3.78/Lt in the same month. 

Reason the VAT Tax cannot be signed off is GST where 
Tamil Nadu is one of the largest states in India collects in higher range of Tax more than One Lakh Crore, after Implementation of GST the State Government loses almost One Lakh Crore as all products comes under one taxation called GST. We Tamil Nadu has the highest tax payers on comapring with other states in India. This is why the Former Chief Minister Jayalalitha opposed severly on GST and never supports the papers submitted 
on both the houses of Parliament. After her death the current CM has almost became an BJP Member in Tamil Nadu accepted everything opposed by Jayalalitha.
By knowing if GST is Impplemented our fund collection will affect seriously and it will led to Financial Crises in Tamil Nadu.


Central Exise Duty by Central Goverment
The tax we pay directly to Central Government is Central Exise Duty for the reason of goods produced within the country and also the goods from outside the country. It is tax on Production or Sale of a good. Central exise duty on Petrol is 19.48 as of now. This is 380% higher on comparing with Congress government on power.


Retail selling price of petrol = cost price of crude oil + 
                                                ( OMC costs + Central Excise Duty )                                                   + VAT

Cost price of crude oil = 35.77

( OMC costs + Central Excise Duty ) = 19

VAT = 34

Retail selling price of petrol  = 35.77 + 19 + 34 = Rupees 88/litre

The price charged to end consumers includes the cost of crude oil, the expenses incurred by oil marketing companies, the price charged to dealers, pollution cess and the state VAT. End Users are We the People of India facing this Big Mark on Daily Expenses.

My View
My View is to reduce the VAT and Excise Duty by State and Central Government respectively, it wont affect much as they can receive funds on various departments. But in Tamil Nadu it may be DMK or ADMK their money resource is 
Drinking Petrol( Alcohol ) burns the Body and 
Driving Petrol ( Oil ) burns to ride. By rising tax on both they will run their government. Almost every department receives money from TASMAC and Petrol Tax And also as i said above TamilNadu Government lost revenue heavily due to GST implementation.

Next, Central Government must reduce their tax on Petrol and Diesel, because its not a State issue it affects National issue affects on rise of the cost on food items as it will be transported from one state to another. By considering on all those things Centre should reduce, which gonna affect in chain reaction soon in coming days. Central Ministers Comments on hikes will makes your day even more better, Petroleum minister said its Due to Dollar rate on Indian Money, added Finance Minister Jaitely is real Jetly by kicking off Petroleum Ministers comment and Jumping on Comments from one to another for day by day.

Therefore I conclude with a Smile and I hope this article could be very useful for you to understand how the Cost of Petrol and Diesel is fixed and Tax rates by State and Central government are collected.
Also Share it to Others Who uses Petrol and Diesel.😃😃

Comment your Vieews on Comment about Petrol and Diesel Hikes