Fuel Price Mystery Solved: Taxes, Not Refining, Drive Rs 100/Litre Cost

• Despite moderate global crude oil rates ($65/barrel), retail fuel prices in India approach Rs 100/litre, raising consumer questions.
• The base cost of crude oil is Rs 37.6/litre, but refining adds only about Rs 3/litre, covering energy, labor, and maintenance.
• Refining a barrel of crude yields approximately 170 litres of petroleum products, including petrol (72-78L) and diesel (38-46L).
• Refining and transportation add Rs 6/litre, while oil marketing companies and dealers add Rs 8-11/litre and Rs 4/litre respectively.
• Government taxes (excise duty and state taxes) are the largest component, adding Rs 40-50/litre to petrol and Rs 35-40/litre to diesel.

Why It Matters: High fuel prices are primarily due to government taxes, not refining costs or crude oil rates.