Archive · 17 Aug 2025
Analyst: Taxes, Not Oil, Drive High Petrol Prices
When you buy petrol, a lot of your money goes to the government, not just the oil companies.
An analyst says that the actual cost of the petrol is about ₹45, but you pay more than ₹100 because of taxes.
The government makes a huge amount of money from these taxes, more than the oil companies do.
Even when the price of oil goes down, the price at the pump stays the same because the government keeps the tax rates high.
Analyst Sujay U states the true cost of petrol is around ₹45 per liter.
Taxes account for roughly 55-56% of the petrol price in Delhi.
The central and state governments collected ₹7.5 lakh crore in taxes from the petroleum sector in FY2023-24.
Excise duty was raised by ₹2 per liter on April 7, 2025, absorbed by oil companies.
The government earns significantly more from taxes than oil companies do from profits.
- Who
- Consumers, the government, and oil companies.
- What
- High petrol prices are largely due to government taxes.
- When
- FY 2023-24 and ongoing.
- Where
- India, particularly Delhi.
- Why
- To generate revenue for the central and state governments.
Consumers
Government
Price Impact
Consumers
Consumers pay high petrol prices.
Government
The government benefits from high petrol prices through taxation.
- Petrol Cost (Analyst Estimate)
- ₹45 per liter
- Tax Percentage in Delhi
- 55-56%
- Govt. Revenue FY2023-24
- ₹7.5 lakh crore
- Excise Duty Increase
- ₹2 per liter (April 7, 2025)
- Main Beneficiary
- Government
