Chennai petrol breakdown

The price at which oil marketing companies (IOC, BPCL, HPCL) buy petrol or diesel from the refinery gate. This is the base of the pump price and the component most sensitive to international crude oil prices and the rupee-dollar exchange rate. When the Indian Basket crude price moves, this is the bar that moves with it.

For every rupee added here, all upstream components (commission, excise, VAT) compound on top. A Rs 5 move in refinery price typically shows up as roughly Rs 7 at the pump after commission and VAT.

This number is not published directly by any government source. It is derived: retail price minus central excise minus dealer commission minus state VAT. Any remaining error from the mid-month PPAC build-up versus the actual pump price lands here.

What the petrol pump dealer receives per litre sold. Paid by the oil marketing company, included in the pre-tax price at the pump. Covers the dealer's margin, staff costs, rent, electricity, and working capital for maintaining tank stock.

Revised roughly every few years by PPAC in consultation with the Federation of Indian Petroleum Industry and the dealer associations. The last revision took effect 1 December 2024. Structure is a flat per-kilolitre rate plus a small percentage of the product billable price, meaning it tracks the base price slightly.

For a typical metro pump, commission is Rs 3 to Rs 3.15 per litre on petrol and Rs 2.30 to Rs 2.50 per litre on diesel.

Tax levied by the Union Government on every litre sold at the pump. On petrol and diesel, excise is broken into four components:

• Basic Excise Duty (BED) — the core excise. Lowest component numerically.
• Special Additional Excise Duty (SAED) — the component raised sharply in 2020 when global crude collapsed and retained at elevated levels thereafter.
• Road and Infrastructure Cess (RIC) — notionally earmarked for road and infrastructure spend.
• Agriculture Infrastructure and Development Cess (AIDC) — introduced in the 2021-22 Budget.

Central excise does not move daily. It changes only by Gazette notification, typically on Budget day or in response to a crude-price shock. The total is a flat rupee amount per litre and is the same at every pump in every state.

Unlike state VAT, central excise goes entirely to the Union. It is the single largest lever the Centre has used to offset crude price movements without letting them show at the pump.

Value Added Tax charged by the state government on the pre-VAT price (refinery transfer price plus dealer commission plus central excise). This is why the same tanker load of petrol sells for Rs 15 more in Mumbai than in Delhi — the states set different VAT formulas, and Maharashtra taxes petrol and diesel harder than Delhi does.

Formulas vary widely. Some states use a simple percentage. Others use "percent OR rupees-per-litre whichever is higher", which in practice becomes a floor at low prices and a percentage at high prices. A handful add per-litre cesses, road-development charges, or surcharges on the VAT itself.

State VAT does not move with crude. It moves when the state government notifies a change in its fiscal-year budget or through an interim revision. A state that cuts VAT by 1 percentage point shows up at the pump within a day, cleanly visible as a drop in this bar.

Note: Sanjaya's current VAT computation uses only the percentage component of each formula. States with a rupee-per-litre additive (Tamil Nadu adds Rs 11.52/L) or a surcharge on VAT (Bihar adds 30%) will show slightly under-stated VAT in the waterfall until the parser handles those cases fully. The raw formula is preserved in the data for audit.