As global crude oil prices fluctuate, petrol prices in India continue to be a major concern for the common man. While consumers pay over ₹95-100 per liter in most cities, a significant portion of this amount is not the cost of the fuel itself but a combination of central and state taxes. As of March 2026, taxes account for nearly 40% to 50% of the retail price of petrol.

The Revenue and Profit Split: In a city like Delhi, where petrol retails at approximately ₹94.77 per liter, the base price of the fuel is around ₹55-57. On top of this, the Central Government levies an Excise Duty of about ₹19.90 per liter. State governments then add their Value Added Tax (VAT), which varies across regions; for instance, in Delhi, it is roughly ₹15.39. Oil Marketing Companies (OMCs) incur a cost of around ₹7-8 per liter for refining, logistics, and margins. Furthermore, petrol pump dealers receive a commission of approximately ₹3.80 per liter. This complex structure means that even when international crude prices drop, the heavy taxation keeps the retail prices high, ensuring substantial revenue for both the Centre and the States.