India imports 85-90% of its crude oil requirements from over 40 countries, including Russia, Iraq, Saudi Arabia, UAE, USA, and Iran.
Petroleum Minister Hardeep Singh Puri confirmed that the country maintains uninterrupted supply from multiple sources.
Refining and Cost Addition
Crude oil undergoes refining to produce petrol, diesel, LPG, ATF, and other petroleum products.
After refining, transport, and dealer commissions are added, the base price rises before taxes.
Petrol Pricing Breakdown in Delhi
In Delhi, 1 liter of petrol has a base price of about ₹52.84, including crude cost, refining, and initial expenses.
The central government adds an excise duty of ₹21.90 per liter, while the state charges around ₹15.40 as VAT.
Dealers receive approximately ₹4.39 per liter as commission.
Revenue Generated for Central and State Governments
The total retail price includes taxes and levies, ensuring both central and state governments earn revenue.
Petroleum taxes remain one of the largest revenue sources in India, providing financial stability.
In FY 2023-24, total petroleum sector tax collection exceeded ₹7.5 lakh crore.
Central government earned around ₹2.7-3 lakh crore through excise duty and other levies.
State governments gained over ₹3 lakh crore via VAT, forming a crucial revenue stream.
Impact on Consumers and Policy
Consumers indirectly fund government revenue through petrol prices, reflecting the tax component in final rates.
This system allows consistent funds for infrastructure and public spending while regulating fuel markets.
