Congress' National Convener Saral Patel, on March 5, 2022, claimed that Indians pay 260% tax on per litre of petrol which is the "highest in the world".

He compared it with tax paid on fuel in other countries and tweeted, "Tax on Petrol across the world: USA 20%, Japan 45%, UK 62%, Germany 65%, India 260%. No, It's not an typo. We pay 260% tax on per litre of petrol, its highest in the world."

However, Patel's tweet doesn't check out against the latest price build-up of petrol. To confirm this, FactChecker looked at data from the Indian Oil Corporation Limited, an Indian government corporation, and Petroleum and Planning Analysis Cell (PPAC), a body under the Ministry of Petroleum and Natural Gas.

The INC convener's '260% tax on petrol' claim is taken from a CARE Ratings report, published in February 2021, titled, 'The Exponential Rise of Petrol and Diesel'. The report analyses fuel prices from between February and May 2020 right up to February 2021. "Prior to the first increase in excise duty, as of February 16, 2020, the government (Centre + states) was collecting around 107% taxes, (Excise Duty and VAT) on the base price of petrol and 69% in the case of diesel," the report read. "With the second revision in excise duty the government was able to collect around 260% taxes, (Excise Duty and VAT) on the base price of petrol and 256% in the case of diesel (as on May 6, 2020).

While Patel's claim holds true for the first few months of the COVID-19 pandemic (March - May 2020), it is not relevant for March 2022. To confirm and understand CARE Rating's conclusion, FactChecker contacted the organisation. Here's the price build-up of petrol in Delhi on May 6, 2020:

Price build-up of Petrol and Diesel at Delhi (Unit: Rs/ltr)

As on 6.05.2020

Petrol

Price Charged to Dealers (excluding Excise Duty and VAT)

19

Excise Duty

32.9

VAT (includes VAT on dealer commission)

16.4

Taxes (Excise Duty and VAT)

49.3

Taxes as % of Base Price

259.5%

Now, here is the price build-up of petrol in Delhi on March 1, 2022.

Price build-up of Petrol and Diesel at Delhi (Unit: Rs/ltr)

As on 1.03.2022

Petrol

Price Charged to Dealers (excluding Excise Duty and VAT)

48.24

Excise Duty

27.90

VAT (includes VAT on dealer commission)

15.50

Taxes (Excise Duty and VAT)

43.4

Taxes as % of Base Price

89.9

The main components in calculating taxes on petrol are Excise Duty, Value Added Tax (VAT) and the price charged to dealers. Hence the current tax on petrol in the country is nearly 90%. Besides, the onus of taxation is not only on the Centre but also depends on state governments.

As on March 10, 2022, the retail price (final price) of petrol is Rs 95.41 in Delhi, Rs 109.98 in Mumbai, Rs 101.40 in Chennai and Rs 104.67 in Kolkata. While the actual breakup of petrol taxes is only available for Delhi, there might be slight differences in taxes when it comes to states. While excise duty rates are constant across the country, states levy VAT which varies across states.

In the case of Delhi, in 2020, the price charged to dealers (base price and freight charges) was only Rs 19. This has increased by 154% as the latest price charged to dealers is Rs 48.24. Similarly, the excise duty and VAT has also been reduced by 15.1% and 5.4%.

Overall, the consumer pays: the price to the dealer, central excise (union government levy), VAT (state government tax), any other taxes or levies like cess which is a nominal amount that state government imposes (excluding Delhi) and dealer commissions.

India imports about 82% of required crude oil for its petroleum products. While international crude oil prices determine the cost of fuels in India, it is only one factor contributing to the rise in petrol and diesel. Internal factors such as central and state taxes and dealer's commissions also affect domestic petrol prices. FactChecker tried contacting Saral Patel via call and text but had not received any response by the time of publishing this article.

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