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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST
An employee counts Indian currency at a fuel station in Mumbai.


Petrol prices in India used to remain stable, whatever the prevailing prices in international markets.

This went on until the government allowed oil companies to link domestic prices of petrol to international market rates in June 2010.

After that, the amount you pay at the selling point fluctuates regularly, with the companies reviewing the prices every fortnight.

While there have been increases every so often in the past, there have also been a few cuts that have made commuters happy.

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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST

In the last 12 months or so, prices have been raised or reduced three times. The steepest increase came in April 2012, when the price of petrol was raised by Rs 7.50.

How is the price of petrol calculated? What are the taxes and duties that are levied?

Business Standard in a news report recently had an oil company executive saying that "oil and petroleum products are global commodities, the prices determined by supply and demand factors on a worldwide basis."

In this graphic, we break down the process of petrol pricing from the point of crude oil being bought to the point it finally reaches the consumer.

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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST

Buying Overseas

Crude comes to India

Oil marketing companies (OMCs) buy crude oil at benchmark prices from foreign suppliers. Actual cost is generally calculated on Brent crude's daily price and delivery price at the refinery.

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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST
A worker walks in between oil barrels at a depot.

A barrel of crude oil is priced currently at about $119.17

Price at this point Rs 40.40 per litre of crude

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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST
An oil refinery.

At The Refinery

From crude to petrol

Price at this point Rs 41.64 per litre of petrol

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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST
Trucks transporting petrol wait to reload outside a depot.

Consumer Bound

Petrol stored by OMCs

Price at this point Rs 44.80 per litre of petrol

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Why petrol prices are high in India

Last updated on: April 8, 2013 10:49 IST
A customer fuels her car with unleaded petrol.

At The Filling Station

The price the consumer pays

Price at final point Rs 67.29 per litre of petrol (price in Delhi)

Source: source image