In India, tax is increasing, not the 'fuel price'

Fuel prices are rising through the roof. The reason we are given by the authorities is the rising crude oil prices, which is just half the truth. Here is how the fuel price is determined.

Fuel prices vary from state to state within our own country. The question is - What is the actual cost of fuel? 
For every litre of petrol we buy - taxes such as excise  duty, customs duty,  VAT, import duty are charged. We end up in paying 43 percent in the taxes. Breakup of these charges is provided below:

Excise duty - Rs 14.45
Import duty - Rs 2.5
Value added tax - 15% - 33% (varies state to state)
These central and state government charges make up the 50 percent of what we pay. The dealer earns as little as 1-2% as profit.

The generated VAT is meant to be used for the development within the states. Value added taxes differ from 15% to 33% from state to state. So depending on the state the petrol prices differ accordingly.

Below is the fuel price list of major cities:

State/City	Petrol(Rs/ltr)	Diesel(Rs/ltr)
Goa/Panjim	57.03	51.04
Orissa/Bhubaneshwar	68.33	51.00
New Delhi	69.06	48.16
Kerala/Trivandrum	71.28	50.86
TamilNadu/Chennai	72.17	51.23
UttarPradesh/Lucknow	74.44	51.35
AndhraPradesh/Hyderabad	75.37	52.46
Karnataka/Bengaluru	76.04	52.64

Goa for example, recently reduced the VAT on petrol thereby making it cheaper by Rs 11.

Fuel price Comparison with other economies
In USA, at present the fuel price is 3.74$ per galon, after conversion it becomes Rs 53.80 per litre. They have fixed per gallon taxes as well as taxes which are a fixed percentage of the sales tax. In fact, in US taxes and charges only account for 12-15 percent. Not even USA, but Pakistan fuel prices are 16 percent less than ours. Whereas if we compare prices with our neighbour Sri Lanka, they are 15 percent less and China is 2 percent less.

Locally decreasing fuel tax can decrease fuel prices, but globally prices are set by supply 
and demand, and therefore fuel tax decreases have no effect on fuel prices, and fuel tax increases actually decreases fuel prices by reducing demand. There is a need for better internal fuel pricing. We need a balance where one can enjoy affordable fuel prices. Oil companies are getting reasonable returns whereas our government gets the required revenue.

Do comment below ! Your feedback is valuable :)

Beat the Petrol & Diesel price rise - Tips on saving fuel

Petrol and diesel prices are going up as time progress. We can expect a few more doses of price hike as oil companies are not left to defend themselves from the increase in global prices.

However, Saving petrol means saving money one can do to improve fuel economy. It's more important to keep tabs in fuel spending.

Tips to save your daily fuel spending:

• Speeding might get us to our destination faster, but we are decreasing our car fuel efficiency.
• Don't drive like an insane- Quick braking & acceleration wastes gas.
• Don't let your engine idle - Idling more than a minute consumes much more fuel than restarting the engine.
• Avoid carrying unnecessary weight in your car - It improves your car mileage
• Get a tuneup - make sure oil change is on schedule. Little maintenance helps in a better fuel economy.
• Check tires - Under inflated tires create drag & can decrease our vehicle gas mileage. Make sure to check tyre pressure.
• Invest in a fuel-efficient vehicle - Trading in a car that gets 8.5 km/litre for one which gets 12.7 km/litre can save us much more per year in fuel.
• Drive less - Using your feet or pedal power can save us cash and help us to stay in better shape.
• Plan your journey so that you avoid congestion, road works and getting lost. Avoid traffic route - use GPS Navigating System. Check for traffic maps from Google. Now you can also check our real time traffic maps on Traffline. Look out for our Android or iPhone app for a fuel saving commute. 
• Share Driving - Set up a carpool with a coworker who stay nearby to save fuel instead. Find other ways to get to work.
• You can also use cash back credit cards to save your pocket. Take advantage of discounts available.

So save fuel and drive more efficiently :)