Today's Petrol Prices

The retail price of petrol and diesel is made up of several components:

• Base fuel price (linked to international petroleum product prices)

• Freight and transportation costs

• Dealer commission

• Central excise duty

• State VAT or sales tax

Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum and Hindustan Petroleum determine the retail selling price based on these factors.

India follows a dynamic fuel pricing system under which fuel prices are reviewed regularly to reflect changes in international petroleum product prices, crude oil prices, currency exchange rates and other market factors. The objective is to align domestic fuel prices more closely with global market conditions.

Fuel prices are generally reviewed and updated at 6:00 AM every day by Oil Marketing Companies. Any revision announced becomes effective from that time.

India imports a large portion of its crude oil requirements. When global crude oil prices rise, the cost of producing and supplying petrol and diesel generally increases. Conversely, lower crude oil prices can reduce fuel costs. However, retail prices are also influenced by taxes, exchange rates and government policies, so pump prices may not always move in direct proportion to crude oil prices.

Taxes form a significant part of the retail price of petrol and diesel.

• The Central Government levies excise duty.

• State governments levy VAT or sales tax.

These taxes are added to the base price of fuel and can substantially affect the final price paid by consumers. Any increase or decrease in these taxes can directly impact fuel prices.

Fuel is often costlier in states that impose higher VAT or sales tax rates. Since petrol and diesel are not covered under the Goods and Services Tax (GST) regime, states have the flexibility to set their own tax rates, leading to differences in fuel prices across India.

Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum and Hindustan Petroleum have the authority to revise petrol and diesel prices every day under India's dynamic fuel pricing system. However, in practice, retail fuel prices do not necessarily change every day. Prices are often kept unchanged for extended periods despite movements in international crude oil prices, exchange rates or product prices. When market conditions and policy considerations permit, OMCs may adjust prices, but daily revision does not automatically mean daily price changes.

In other words, fuel prices are reviewed daily, but they are not always changed daily.

No. Petrol and diesel are currently outside the GST framework. Instead, they are subject to Central excise duty and State VAT or sales tax. This is one of the key reasons fuel prices vary from one state to another.

Yes. Petrol and diesel prices can decrease when:

• International crude oil prices fall.

• The Indian rupee strengthens against the US dollar.

• The Central Government reduces excise duty.

• State governments reduce VAT or sales tax.

• Oil Marketing Companies lower retail prices in response to market conditions.