The procedure for petrol and diesel price decide to increase or decrease. How Fuel rate increase?
Levels of charges and taxes regulated by OMC on petrol and diesel to increase the cost. OMC profit margin and marketing cost in crude oil to increase the petrol/diesel price.
What is OMC?
Omc stands for an oil marketing company
The crude oil is at first delivered by oil extracted companies by various tankers, ships, etc. Then it reaches to Omc and Omc deliver to Crude oil refinery for extract kerosene, diesel, and petrol.
Omc conducts the appeal of crude oil and extraction to various fuel and sells such fuel to Diller.
In India Top 3 oil marketing companies having 90% above Market, share are
- IOCL (Indian oil corporation ltd)
- BPCL (Bharat petroleum corporations ltd )
- HPCL (Hindustan petroleum corporation ltd)
Who and how the cost of crude oil was decided?
The first crude oil supplier takes the selling charge of crude oil. Then it includes the transportation charge which is known as cost and freight price. Another tax is added name as an import charge which covers insurance charges, ocean losses, and port fees.
After that crude oil notified by a government and transported to a refinery center to extract different products. After Refine crude oil additional charge added known as RTP (refinery transfer price) and after refined Omc sells to different Diller. The refined oil transportation charge is known as an inland charge added to it. And omc marketing cost also added by omc. The selling cost to Diller is known as Depo price.
Cost and freight price + import charges + costumer duty + refinery transfer price + omc marketing cost + inland freight = Desired price
After all the above procedure, the central government regulates Excise duty and State government regulate VAT on it and the Diller commission was added according to per liter.
Ultimately passing all the taxes and charges consumers can receive petrol and diesel at their retail price.
The crude oil and excise duty and vat are interconnected with each other.
When the crude oil price decrease the vat and excise duty increased by govt and decreases when the crude oil price increases. Some time these taxes are not decreased by govt due to the building of infrastructure.
Different states have different taxes different Diller commission different vat different fuel price.
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